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Grant the IIS_IUSRS group read access to the /LM/SmtpSvc/ and /LM/SmtpSvc/1/ nodes in the IIS Metabase. How can you do it? You can download the Internet Information Services (IIS) 6.0 Resource Kit Tools at http://go.microsoft.com/fwlink/?LinkId=67351. This resource kit includes a Metabase Explorer that works with IIS 6.0 or IIS 7.0 with IIS 6 Management Compatibility role services installed. On IIS 7.0, the IIS Admin Service must be running for the Metabase Explorer tool to work correctly.
Why will this work? It will work because IIS 7 automatically adds the IIS_IUSRS membership to the worker processes token at runtime. By doing this, accounts that have been defined to run as 'application pool identities' no longer need to explicitly be part of the IIS_IUSRS group.
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http://blogs.msdn.com/b/akashb/archive/2010/05/24/error-cdo-message-1-0x80040220-the-quot-sendusing-quot-configuration-value-is-invalid-on-iis-7-5.aspx