The error is along the lines of
454 5.7.3 Client does not have permission…
The reason for this is if you disable Anonymous access in the Authentication area of your SMTP Connector. Why would you do this you ask? On my hunt to disable Relaying in Exchange 2003, i unchecked this. The problem is that anyone sending email to your exchange server is now stopped, as they wont authenticate against your server.
Disabling Relay is a matter of going to the Relay area, removing all items from the IP addresses, setting the radio button to “Only the list…” and check the bottom about authenticated computers
Do you want a quick test? Telnet in from an outside machine to your exchange server. Try to send an email to someone outside of the server from someone outside of the server, if it lets you, relaying is still enabled