wp-mail.php never attempts login

I am trying get to post-by-email to work, but wp-mail.php does not seem to be attempting to login – no matter what username/password I use, I always get the following response from wp-mail.php “There doesn’t seem to be any new mail.”. If I put a bogus servername in such as “56790qwq.com” I get an expected error: “Ooops POP3 connect: Error [2] [No such file or directory] “, but as long as the servername is valid, it doesn’t matter what the user/pass is.

Any thoughts?

This is a new installation of v2.0.1

Thanks,
Neil