My host requires "pop before smtp" meaning that outbound smtp messages must have authentication or they will be rejected. This should become the norm since spammers like to use unprotected smtp servers to blast spam to the internet.
Since there is no field in the e-mail admin to address this that I could see - I'm a newbie, remember, be kind! I added the following to functions_send_mail.asp:
and after this I was able to send e-mails without error. Of course substitute your own smtp login information for the dummy names I put in.
Hope this helps.