Evolution acts just like Vista! If your POP/IMAP server rejects your password for whatever reason, you are prompted to enter the correct password. Clicking Cancel does nothing, the dialog goes away then *immediately* returns. There is no way to use evolution until you know the password for the account. You cannot even e-mail anyone to tell them about the problem. Not nice.
yap I had also this problem to when ask for password, appears OK or cancel and press cancel don't cancel and don't stop. I have to do : killall evolution I had this same problem also with digital signatures .
Sometimes even that doesn't work for me, I have to start evolution using evolution --offline instead, then switch it to online mode. This seems to work more.
I think this was due to a faulty Fedora patch. I've since disabled it in F7 and F8 and other users have reported that password cancellation is working better. Closing this as CURRENTRELEASE but feel free to reopen if you're still having problems with it.