Not sure what's wrong. What does it show when you view details of the error/warning? Is it still saying the certificate belongs to *.dreamhost.com? What domain does the error detail indicate is being contacted, that doesn't match *.dreamhost.com?
I'm currently using Outlook 2013 which has a much different GUI than 2007, so posting a screenshot won't help you. I've previously used Outlook 2007 however using the alternate host method. The fields in Outlook2013 that need to be changed are "Incoming Mail Server" and "Outgoing Mail Server (SMTP)". They are in a dialog titled POP and IMAP account settings.
Did you completely restart outlook after making the change? Open task manager and make certain its not still running after closing the window (it usually is).
The cause of the warning is that mail.example.com doesn't match who the certificate is issues to *.dreamhost.com. If you are getting the "Incoming Mail Server" and "Outgoing Mail Server (SMTP)" correctly updated, there should be no way for you to continue to receive the mismatch error.
In MY opinion, TB does it wrong if it lets you permanently accept a domain mis-match warning. That defeats the purpose of having a certificate. If you can permanently accept a domain mismatch warning, then the server on the other end could be anything.