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SBS 2003 Exhange SMTP Fails to Authenticate

I do volunteer work at a local No-Kill animal shelter and I have just upgraded our server to SBS 2003 and I am using Exchange Server with the POP3 Connector to deliver mail to the Exchange mail boxes.  That part is working fine.  This issue I am having is that when we try to send email outside of the network they come back with the following error
      There was a SMTP communication problem with the recipient's email server.  Please contact your system administrator.
            <shelter_domain.org #5.5.0 smtp;550 must be authenticated>

I found out that our ISP and Web Hosting requires authentication.  I have tried going to Small Business SMTP Connector and put in the SMTP DLS and also tried 1and1.  Both of these would not send with or without going to the Advanced tab and changing it to Basic Authentication and entering in a valid email for each of these.  After reading some other post I also tried some settings in the default SMTP virtual Server.  In the end I changed the virtual server setting back to where I started.   Not sure if there is a return to defaults for this or not but I think I kept good track of what I changed.  I also notice that when I ran the Internet and email Wizard it seemed to put things back.

As a workaround I tried using my personal cable ISP provider as the SMTP for delivering mail. I turned on the basic authentication and used me@cableprovider.net as the account to authenticate with and it works now.  (as a side note on my SBS 2003 server at home I did not need to authenticate but it could be because I am running their service at home)

I would like to get this running properly not sure If I am going to have issues with my personal ISP if I do not fix it.


Questions
1.  Who should be responsible for send my email the ISP or the Web Hosting company?
2.  Just in case I did not put something back is there a way to put the SMTP settings back to default?
3. Could the Web Hosting company be authenticating by matching the sending email address(user@mydomain.com) to the one used for the SMTP authentication (admin@mydomain.com) if so can I pass this through?
4. Can someone give me detailed instructions on how to resolve this?

Previous Email Config
Before changing server and we brought email into the desktops I used these settings and it worked fine
POP3 Incoming: pop.1and1.com
SMTP outgoing mail.dls.net

ISP
DLS Internet Services
http://www.dls.net
POP3 Incoming: mail.dls.net
SMTP outgoing mail.dls.net
Primary DNS:  216.145.243.22
Secondary DNS:  209.242.0.2

Below is taken from DLS FAQs
2.1 Why am I receiving an error, "Relaying access denied" when trying to send mail?
DLS dialup customers should use mail.dls.net as the SMTP (outgoing) and POP3 (incoming) mail servers. For DLS web hosting customers, please see question 3.1.
If you are dialing up outside of the Chicagoland area, you must use a mail client that supports SMTP authentication (such as Outlook Express or Netscape Messenger) and configure it to use the same settings as for POP3. For example, if your email address was joe@dls.net, you would use joe as the username for POP3 and for SMTP authentication. If you do not enable SMTP authentication, you will not be able to send outgoing mail and will receive an error, "Relay access denied".

WEB HOSTING
1&1
http://1and1.com
POP3 Incoming: pop.1and1.com
SMTP outgoing smtp.1and1.com
Primary DNS:  216.145.243.22
Secondary DNS:  209.242.0.2
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67Buzz
Asked:
67Buzz
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1 Solution
 
mcse2007Commented:
just to answer some of your questions:

Questions
1.  Who should be responsible for send my email the ISP or the Web Hosting company?
Your ISP
Your Web Hosting company only does the DNS for your MX records so the entire world will find your Exchange

3. Could the Web Hosting company be authenticating by matching the sending email address(user@mydomain.com) to the one used for the SMTP authentication (admin@mydomain.com) if so can I pass this through?
through MX records from Web hosting company, it matches incoming @mydomain.com with your MX records to your public IP. For example, an incoming email with registered domain @mydomain.com will be resolved by your Web hosting company through the MX record - for instance smtp.mydomain.com=>69.xx.xxx.x
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67BuzzAuthor Commented:
Thanks Mcse2007 I thought the ISP shoud be it.  That is how I have my home server set up. It is also how I am getting the email to go out at the shelter now using the same ISP SMTP as I do at home. I think I still need some clarification on how to set up the out going SMTP in SBS 2003.  my ISP tells me I should check the box that says use the same as my incoming.  I do no not see that as an option.
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67BuzzAuthor Commented:
Does anyone else have some input on what I may do here the ISP is telling me I need to authenticate with the same email as I  am receiving the emial on.
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67BuzzAuthor Commented:
2/3 of question answerd
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