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SMTP server setup not sending and nothing returned

I am using Exchange 2007 on SBS2008 and am trying to set it up to send mail to the internet (internal is fine) I have followed this page
http://www.petri.co.il/configuring-exchange-2007-send-external-email.htm

and then this one
http://www.petri.co.il/authenticated-or-anonymous-smtp-relay-with-exchange-2007.htm

I have tried only Basic Authentication also as in this page
http://www.advancedintellect.com/post/2011/03/02/Exchange-2010-and-SMTP-settings.aspx
but email just does not go anywhere and I get no failure message back.

I have followed this article
http://technet.microsoft.com/en-us/library/aa995718%28EXCHG.65%29.aspx
and get the following....

220 SERVER.mydomain.local Microsoft ESMTP MAIL Service, Version: 7.5.7601.1
7514 ready at Sat, 11 Feb 2012 10:53:43 +0000
EHLO
250-SERVER.mydomain.local Hello [192.168.0.4]
250-TURN
250-SIZE
250-ETRN
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-8bitmime
250-BINARYMIME
250-CHUNKING
250-VRFY
250-TLS
250-STARTTLS
250 OK
AUTH LOGIN
504 5.7.4 Unrecognized authentication type

If I continue on I get.....

MAIL FROM:email@mydomain.com
250 2.1.0 email@mydomain.com....Sender OK
RCPT TO:email@internetdomain.com
250 2.1.5 email@internetdomain.com
DATA
354 Start mail input; end with <CRLF>.<CRLF>
test message
.
250 2.6.0 <SERVERA1XvpFVjC00000003@SERVER.mydomain.local> Queued mail f
or delivery

Now im lost.

ASKER CERTIFIED SOLUTION

Suliman Abu Kharroub

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Leigh2004

ASKER

Hmmm the server im testing is on a dynamic ip, and just got this error back when sending test email to Gmail

mx.google.com gave this error:
[xx.xx.xx.xx] The IP you're using to send mail is not authorized to send email directly to our servers. Please use the SMTP relay at your service provider instead. Learn more at http://support.google.com/mail/bin/answer.py?answer=10336 bv1si3797793wib.2

And I just had a load of Delivery Delayed messages back, then some emails I sent to a Yahoo address have now arrived after about 3 hours.

Suliman Abu Kharroub

You need to use a smart host to send emails, dynamic ip is not a reliable SMTP host to send emails from. That's why other domains don't accept emails from your server.