Someone had the same exact issue a while back and I found the thread in the Archives.  
Here it is:  (Archives are your Friend)

http://www.mail-archive.com/[EMAIL PROTECTED]/msg73919.html


In their case they had to restart the SMTP server after looking at the Advanced 
Options.  this may be a littel different since they were using 6.06.x.  Read this 
archive and I bet it will help you solve your problem.  It did for them.

Travis





---------- Original Message ----------------------------------
From: "Brad Morgan" <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
Date:  Wed, 18 Feb 2004 09:48:56 -0700

>>> The  SMTP  server  for  "swilson"  does  not  recognize  any  of the
>>> authentication  methods  supported  by  Entourage. To send mail, try
>>> disabling  SMTP  authentication  in  the account settings or talk to
>>> your administrator.
>
>> This sounds like it could be a problem with the AUTH methods available
>> on  client  and  server.  When you issue an EHLO, what does your IMail
>> server  report  as  available  (this  changes  depending on which user
>> database option you are using, BTW)?
>
>> It's  particularly likely that Entourage doesn't like LOGIN, if that's
>> all you're offering. Post back and let us know.
>
>Since I don't see anything in the Imail logs, I fired up Ethereal to
>capture the conversation.  Its only 8 packets long.  Entourage decides
>it can't authenticate based solely on the server response of:
>
>220 horizonint.com (Imail 7.13 35298-1) NT-ESMTP Server X1
>
>I can provide the rest of the packets if they contain any additional 
>information.
>
>Thanks for your help with this.  I'm really confused now.
>
>Regards,
>
>Brad Morgan
>
>
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>

--
Travis Rabe
Technology Director
The Davidson Group
--

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