For those who are experiencing this error and sync probs I tried this suggestion from somebody else and it is working:
To fix this issue you will need to reconfigure your account.
1. To re-configure your account – Click the Accounts Tab and Click the + symbol with the @ sign.
2. Type your e-mail address, password and display name.
3. Place a check on “Manually Configure Server Settings”
4. Under “Incoming Server Information” select “IMAP” as server type.
5. In the Server Address field, type imap-mail.outlook.com and in port type 993
6. Place a check on “Requires a secure connection SSL”
7. Under “Outgoing Server Information” type smtp-mail.outlook.com as server address and in port type 587
8. Place a check on “Requires a secure connection SSL” and “Requires Authentication”
9. Click Next. And you’re done, you should now see a new account added in the left pane of your Windows Live Mail.
10. If you wish to move messages from the previously added account, you can drag messages and drop them to the appropriate folders.
11. Your messages should still all be re-downloaded, except for Sent Messages which you can drag and drop.
12. After your account is setup, you can remove the previous account by right clicking on it and selecting “Remove Account”
The only thing I didn't do was remove the old account because Microsoft may fix that eventually. I'll give them a couple more days on that one.
Hope this helps somebody,
PJ
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