>But is this SMTP before POP3

no, Imail doesn't support "pop before smtp"

>so that the user checks mail before sending ?

no

>and what is the process of setting this up. ?

in smtp security, click relay for addresses and enter your "trusted" 
ip addresses.

UNcheck "disable smtp auth reporting/announcing"

tell your users to set up their mail programs for SMTP AUTH

>also does relay for local hosts or relay for local users not work 
>this way also. ?

those setting are insecure so don't use them. to repeat, the ONLY 
secure setting is SMTP AUTH

Len


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