MS exchange SMTP config

I’m not sure if this is the right forum to post this.
Anyway, I’m trying to setup a Windows SBS 2003 server for a non profit group. In the email configuration wizard for outgoing mail it gives me two choices:

  1. Use DNS to route e-mail:
    Click if you want to use DNS to send e-mail to the Internet. Exchange sends outgoing e-mail using a mail exchanger (MX) resource record in Domain Name System (DNS).

  2. Forward all e-mail to e-mail server at your ISP:
    Click if you want to send all e-mail to the Internet through your ISP’s e-mail server (relay). Exchange will forward all e-mail to a Simple Mail Transfer Protocol (SMTP) smart host at your ISP.
    You must enter the e-mail server name or IP address for your ISP.
    Before selecting this option, check with your ISP to see if they allow e-mail forwarding.

My question is, what should I choose? I’ve already setup and verified that I can get pop3 messages into MS exchange on some test user accounts, that wasn’t too hard. But I’m kinda new at all this and I’m not sure what will work with Dreamhost for outgoing SMTP.

I dont think they let me “relay” the outgoing email to thier server since they require a login to send.

Any ideas? Or perhaps there’s some settings I’m missing, maybe some SMTP configurator to config each accout for outgoing?


Choose the first option unless this machine is strictly internal and shouldn’t have anything to do with internet mail delivery. If this is the case, smarthost your mail through your ISP’s (the company actually providing your internet connectivity) outbound SMTP server. Dreamhost has nothing to do with this, even if they are handling their web and mail hosting.

Secondly, what’s the name of this organization? I want to make sure I never give money to a non-profit that throws away money on expensive software like MS SBS when there are many, many free alternatives.

If you want useful replies, ask smart questions.

Well I was hoping to have my mail sent through dreamhost servers so it could be marked with the domain name.

As for throwing money away, yeah, I suppose, if you consider $24 throwing money away. Thats the charge for window SBS 2003 non-profit price from They wanted compatability and outlook calendaring so I figured I’d set that up with that even though I’ve never done anything like this before. Its a foster family agency just looking to have the computers networked to share resources like printers, and wanting to have email and calendar stuff setup.

MS makes things a lot harder than they have to be I can tell you that. Dont get me started on how atrocious thier SP1 process is for SBS 2003. The windows update only gives you the 1st of 5 updates required, and that update screws everything up (like add user doesn’t work anymore), until you finish the rest of the 5 needed updates which are NOT availible in windows update, only by manually searching out knowledge base articles.