Consider this: on Windows XP you could sync to a SharePoint server in the cloud such as Office Live using just HTTP. Now when you upgrade to Windows Vista if you try and do this exact same thing you will get an error. That is due to changes in the Vista security model. From one of the developers on the team:
Vista does not allow access to an authenticated server that is using basic authentication over HTTP. The basic authentication scheme transmits passwords in the clear. Hence for security reasons, one must now use HTTPS thereby encrypting the contents including the password.
So if you are using SharePoint in the cloud make sure to connect via HTTPS.