I, too, am having the same issue. After receiving the initial Froyo update, Exchange was working perfectly fine on my Motorola A855 (Droid). After receiving the secondary update including Flash download capability, I had issues with the battery having a maximum lifespan of about an hour, with all background applications/services disabled. Due to this, I chose to factory reset my phone. Upon doing so, I am now unable to successfully add the Exchange account to the default e-mail application, as it crashes when receiving incoming server settings.
Following some advice posted above, I logged into the OWA and removed my Droid from the listed mobile devices menu. I then enabled a pattern screen lock, as if I recall, was required upon setting up the Exchange account after the initial Froyo update. However, the e-mail application still is crashing upon setup.
Pretty major issue, if you ask me. Working for a large corporation, I cannot really ask my Exchange server administrator to reset my mobile PIN each time I may choose to factory reset my Droid.