I ran into this problem when I had to reset the connection between blog on Posterous and MovableType. Here's what you need to know to reconnect the two blogs via Autopost:
1. Blog URL: Enter the top-level domain to your site. For example, I would enter "http://www.haungo.com" and not "http://www.haungo.com/cgi/mt4/mt.cgi?" (which is the login page to the dashboard).
2. Username: The [username] for your MT blog.
3. Password: This one is tricky! It is not asking for the password for the [username] (in step 2).
Instead, you need to provide the "web services password". That secondary password can be found via the MT system overview > manage users > [username] > profile preferences > web services password.
After entering all three fields, click on the SAVE button and you should be ready to go!
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