Technical, Before I make any changes, can I confirm what you are saying.
Incoming Mail (POP3): 127.0.0.1
Outgoing Mail (SMTP): 127.0.0.1
Is this correct??
Fully correct

Only that account name should be: firstname.lastname#pop.xxx.net
Where do I put the SMTP part?
Outgoing Mail (SMTP): 127.0.0.1
Check for SMTP Authentication
On the details of SMTP authentication, add:
Account name: firstname.lastname#smtp.xxx.net
and your password.
If it does not work, test: firstname.lastname@xxx.net#smtp.xxx.net
But, avast can do this automatically! 
Try your original settings into Outlook Express account properties:
Incoming Mail (POP3): pop.xxx.net
Outgoing Mail (SMTP): smtp.xxx.net
Account name: firstname.lastname
e-mail address: firstname.lastname@xxx.net
CLOSE OUTLOOK EXPRESS
Run Mail Protection Wizard from Start Menu > avast! antivirus
Choose other email programs than Outlook/Exchange and set the automatically configuration...
Everything will be automatic changed for you
