Your error code translates to SMTP_RESPONSE_ERROR, which means that Windows Live Mail has received an invalid response from the SMTP server.
This might be due to a number of causes, the most likely one being that you have incorrect connection or authentication settings.
Firewalls could block access to your port. If you have a firewall performing Deep Packet Inspection it might block your traffic because you are sending SMTP packets on a port that is usually reserved for POP3. However, this seems unlikely because you said it works with Thunderbird.
Your Windows firewall might block your Windows Live Mail. Check that it is allowed to communicate with your SMTP server.
Some anti virus software's email scanning features seem to interfere with Microsoft Outlook and generate this error code. Maybe the same is true for Windows Live Mail. Try disabling or uninstalling your anti virus software and see whether the error persists.
Are you sure the port is correct? Port 110 is usually POP3, while SMTP is on port 25. – Chris – 2013-06-03T07:13:49.400
Yes, I have configured the same in "Thunderbird" and in that it is working fine and now configured in "Windows Live Mail" because thunderbird makes my system little slow. – Kathir – 2013-06-03T07:23:54.890
Did you double check your SMTP authentication settings? – Chris – 2013-06-03T07:25:09.643
your error code points to an authentification problem (wrong format for user name, typo in the password, wrong port). Have you tried entering the username/email with or without the @example.com? There may be differences in how your email clients handle this. – user 99572 is fine – 2013-06-03T07:49:43.677