Recently I dusted off a laptop I hadn't used for a while and setup it up to connect with Microsoft Online Services. After entering my [correct] username and password I continued to get the same error. The client was unable to establish a secure connection with the server.
After re-typing my password a few hundred times, I did some digging around and found out that this error was due to my system clock on my laptop being off by about 10 minutes. Once I updated my clock I was up and running!