Where are you seeing this error message, outlook?
Moodle has nothing whatever to do with your POP3 server. I am prepared to be proved wrong (wouldn't be the first time), but I don't think that this is to do with Moodle. Brian's problem turned out to be a weird interaction between Moodle and his local sendmail and I think he has now sorted it - Martin has provided a fix for it in CVS too. Nothing to do with your problem though.
This is probably the work of a virus or spammer. Have you done what the message said, and contacted your mail administrator? The full headers of one of the messages would also prove the origins of the message.
Strange email problem
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