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I had same issue. If you have a corporate exchange account, it seems like it defaults to this. What I did to fix this was delete the corporate account, change the option, and then add the account back into your device.

This may not work however, if your exchange server security policy requires it. If it does, you may want to look at Touchdown. If you do a search on "froyo pin problem" you will find some threads that discuss this.
 
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