The Collaborative International Dictionary of English v.0.48:

Discourage \Dis*cour"age\ (?; 48), v. t. [imp. & p. p.
   Discouraged; p. pr. & vb. n. Discouraging.] [Pref. dis- +
   courage: cf. OF. descoragier, F. d['e]courager: pref. des-
   (L. dis-) + corage, F. courage. See Courage.]
   1. To extinguish the courage of; to dishearten; to depress
      the spirits of; to deprive of confidence; to deject; --
      the opposite of encourage; as, he was discouraged in his
      undertaking; he need not be discouraged from a like
      attempt.
      [1913 Webster]

            Fathers, provoke not your children to anger, lest
            they be discouraged.                  --Col. iii.
                                                  21.
      [1913 Webster]

   2. To dishearten one with respect to; to discountenance; to
      seek to check by disfavoring; to deter one from; as, they
      discouraged his efforts.

   Syn: To dishearten; dispirit; depress; deject; dissuade;
        disfavor.
        [1913 Webster]

WordNet (r) 3.0 (2006):

discouraged
    adj 1: made less hopeful or enthusiastic; "desperate demoralized
           people looking for work"; "felt discouraged by the
           magnitude of the problem"; "the disheartened instructor
           tried vainly to arouse their interest" [syn:
           demoralized, demoralised, discouraged,
           disheartened]
    2: lacking in resolution; "the accident left others discouraged
       about going there"