This is an update rather thatn a question. I have created a new post as my original post is locked. (http://social.microsoft.com/Forums/en-US/crm2011beta/thread/d6e58394-8fe8-4cf1-b1bd-ddb3220aa844)
Basically, with claims-based authentication and IFD enabled and working, I was unable to configure the Outlook client. The logs showed the above error. ADFS and CRM are on the same server.
I have been working with Microsft on this and a workaround has been found. An alias was created for ADFS, and after reconfiguring ADFS and Claims-based authentication to use the alias, I can now configure the Outlook client.
Hopefully, this will be the same fix for others with the same error message.
Marc Collins www.QGate.co.uk