http://technet.microsoft.com/en-us/library/cc287879.aspx
In the section for configuring the SMTP service, steps 8 and 9 talk about setting up the relay permissions. Make sure you either include the server name of the localhost or select the All excepts the list below option. You would think that localhost would be able relay through its own server without any changes to the settings, but that is not the case.
In Microsoft Office and SharePoint 2010, many of Google's features are in effect mimicked while maintaining consistency enough for continued business use.
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