There are many possibilities that could cause this issue:

• Username or password is incorrect
• URL is incorrect or has changed
• If there is more than a 5 minute difference between your local computer and the CRM server
• The specified user does not have enough privileges
• The CRM webservice may not have started due to low memory on the CRM server.  You can check this by opening up internet explorer and going to the Organization Service URL or Discovery Service URL. You can find out more about your URL here:  http://msdn.microsoft.com/en-us/library/gg328127.aspx