Same for me. It actually worked since I jailbroke my 1.1.4. but since yesterday it started doing the same thing as yours. Could be a package we installed. I tried going into Settings>Mail>Accounts>"my email address">Password and discovered that the password field contains an 8 letters word(stars). My actual password has only 6 letters! So I tried changing it. The authenticating went ok but it still puts the 8 digit password back in that field and get that password/user match error message every time I open the mail.