smtp 550 error 5.7.1

Error code on its own is useless.

You need to post the full smtp error message.

Is this for inbound or outbound email?

Simon.

Your message did not reach some or all of the intended recipients.

      Subject:      RE: PO 49358 for 1 copy DS-1 third edition 3 volume set with courier charge to Seadrill Stavanger, Norway office.
      Sent:      2/26/2007 4:18 PM

The following recipient(s) could not be reached:

      wendy.yap@seadrill.com on 2/26/2007 4:18 PM
            You do not have permission to send to this recipient.  For assistance, contact your system administrator.
            <mail.thhill.com #5.7.1 smtp;550 5.7.1 This system is configured to reject mail from h-67-100-1-109.hstqtx02.covad.net>
this is happenong when we try to send just to this account

our mx record is is external and internal meaning we have an inside address and an external ISP address

And?
Not really bothered about your internal MX records as the internet doesn't use those.
What you should be concerned about is what I outlined above. Your DNS that the internet uses is a mess and you will find that more sites will block your email until you fix it.

Simon.

when you get 550 5.7.1 <servername.yourdomain.tld>: Helo command rejected: Host not found or 450 4.7.1 <servername.yourdomain.tld>: Helo command rejected: Host not found there can be several solutions. The fix that worked for us was this: The IP address of our server did have a "reverse" (pointer) DNS entry, but the name in the DNS did not match the name reported by the server itself. The names must always match. Our mailserver is a W2K3 server, and the netbios name was SMTP01.domain.com. However, the public DNS registered to that ip-address was SMTP.domain.com. Hence we had to change the netbios name to match the official DNS name of the server.