If you cancel the credentials dialog box, Outlook 2003 silently enters Offline mode, and you are not connected to your mailbox

KB Article: https://support.microsoft.com/kb/949918

INTRODUCTION

Microsoft Office Outlook 2003 may prompt you repeatedly for a password. If you cancel the credentials dialog box, Outlook 2003 silently enters Offline mode, and you are not connected to your mailbox. In this case, you do not receive an error message or a notification.