Yeah, it's an email provider-side problem but it's not always related to the provider's servers going down. Hopefully they'll get it fixed up for you soon.
How often do you have it set to retrieve mail? Sometimes if the interval is too short, you will be asked to enter password. Have you changed this setting recently?
Also, .mac mail had a problem a short while ago that caused this behavior (if you are using .mac). They resolved it, but it could be back.
Actually, this happens quite a lot. Try making another User account, Log In as that User, and set up your Mail again for the new account, using all your old settings. Dragging the com.apple.mail.plist folder to the desktop doesn't seem to achieve much.