Its pretty standard to allways specify your isp's smtp server instead of the email service's smtp server. Why?
Back in the day, anyone could use anyone's smtp server. But spammers started abusing this, and now most smtp servers will reject you if your ip isn't in the specified range ("...relaying denied...").
So either get sendmail working and just specify
'localhost', or use your isp's smtp server.
Oh, while I"m at it, apple-option-v is cool in mail.app because you can see what its doing.
Ok, now I'm going to read the first 5 pages to see how redundant this post has been ;-)