UI question: app can't continue, what now?

[Ed Greenberg]

In the case that an application cannot continue, what is the correct UI behavior after the user presses cancel.

Example:

* App starts and user is dropped into modal dialog box for first-time setup.
* User provides UID and Password
* App goes off to network and UID/PW fails
* User dropped back into modal dialog box with error and prompt for UID/PW.
* Eventually user gets tired of this, doesn't have a UID/PW that will work and presses cancel.

Where do I go from there?
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