Welcome to TechIMO!
Your outgoing server is likely not properly configured. The most common problem is the lack of authentification, especially given the error message you have received. It is due to your ISP provider restricting access to SMTP port 25.
Go to the Tools menu in outlook/outlook express, and click on "Accounts." In this window, click on your domain to highlight it, then click on "Properties."
Click on the "Servers" tab when the next screen pops up. Now, check the box that says, "My server requires authentication" for Outgoing Server. Click "Okay". Try sending mail.
Hope this helps,
Robert Richmond