Humm, a bit confusing, I also run WWF on my Dell PE server with WinSrv2003 Std, but I don't use Exchange, I use the IIS SMTP server (CDOSYS) to send mail and it works just fine.
Is this a new problem for you?
You also say you have JMail com installed, are you declaring the component correctly to use it?
Or, maybe it's a conflict with several SMTP's all configured to port 25 and none will work.
There's also the slight possibility that your ISP is blocking port 25 to prevent open relays, mine did, but they opened it when I requested it and they do periodic tests to determine they can't relay through it.