Update Security Settings message with Exchange account on Froyo

[JWise1203]

I am the Exchange Administrator at my job. I have noticed recently that users whose phones have been updated to 2.2 Froyo are starting to receive a notification prompt to "Update Security Settings" every time they power on their device. Unless they accept this message, they never sync with the Exchange server (Exchange 2007 SP2). Now that I am running XDAndroid, I am experiencing the same issue.

We have an open policy on mobile devices on our Exchange System. Has anyone figured out what is going on here? I have searched around the web and the only workarounds that I have found are to install the Touchdown app or to flash to an earlier version of Android.