SendMail SMTP Issues

Right, so this is the last problem I think I’m having before everything is set up and working…hopefully lol…and that’s sending email from a client like Outlook.

SendMail is setup and is recieving and distributing emails fine from both local and external sources, senging internally is also fine but the problem comes when trying to send to an address outside, say ‘someone@yahoo.com’ when I try this i get the following error message;

The message could not be sent because one of the recipients was rejected by the server. The rejected e-mail address was 'someone@yahoo.com'. Subject 'test', Account: 'test', Server: 'mail.mydomain.com', Protocol: SMTP, Server Response: '550 5.7.1 <someone@yahoo.com>... Relaying denied. IP name possibly forged [IP_ADDRESS]', Port: 25, Secure(SSL): No, Server Error: 550, Error Number: 0x800CCC79

Obviously that makes sense, so I thought to myself the most obvious course of action is to turn on Authorisation, so within SendMail Mail Server > Network Ports I ticked Require SMTP authentication. Within Outlook Express I’ve gone into the account settings and have ticked “My server requires authentication” and then ticked “Use same setting as my incoming mail server”, but now when I try to send I get the following message;

The message could not be sent because the server rejected the sender's e-mail address. The sender's e-mail address was 'email@mydomain.com'. Subject 'test ', Account: 'test', Server: 'mail.mydomain.com', Protocol: SMTP, Server Response: '530 5.7.0 Authentication required', Port: 25, Secure(SSL): No, Server Error: 530, Error Number: 0x800CCC78

I’m a bit confused as to why that is displaying the error “Authentication Required”?

Anyone have any ideas? I’ll keep hunting around for an answer, but would greatly appreciate a point in the right direction.