I created a new Gmail account last year. When I attempted to set up Outlook 2007 to handle my messages, I failed. I did everything by the book, or so I thought, but nothing worked. Outlook kept prompting me for my password.
I came across the solution that I had to reset my CAPTCHA. This explanation is posted on the Google site under “Common Errors”: https://support.google.com/mail/bin/answer.py?hl=en&answer=86376#
If you use two step verification on your gmail account, resetting you CAPTCHA will not be enough to get it working.
You must also Create an Application Specific Password.
I missed this step the first time around, so I thought I’d share it here as just one resource available to you. I do not know if all of this information was available the first time I tried this a year ago, or if I just simply overlooked it. But in case anyone else is having the same difficulties, here it is. Enjoy!