Install IIS SMTP Service
You can install IIS on Windows 2000/XP as follows: "Control Panel->Add/Remove Programs->Windows Components->Internet Information Service->SMTP Service". For Windows NT user, you can install it from Option Pack 4.0 of Windows NT. After installed, you can start it from "Control Panel->Administrative Tools->Internet Information Service".
ESMTP authentication/Trusted IP Addresses
The default setting of IIS Smtp service may cause failure in sending email ("Error with sending recipient"). Here are two solutions to the problem.
Enable ESMTP authentication of IIS SMTP Service
1. "Control Panel->Administrative Tools->Internet Information Service->Default SMTP Virtual Server->Properties->Access->Authentication. ". Check the BASIC Authentication.
2. "Control Panel->Administrative Tools->Internet Information Service->Default SMTP Virtual Server->Properties->Access->Relay ". Check the "Allow all computers which successfully authentication to relay ..."
Trusted IP Addresses
If you don't want to do ESMTP authentication, you can add the IP address of your computer to Relay IP Addresses List of IIS SMTP Service.
"Control Panel->Administrative Tools->Internet Information Service->Default SMTP Virtual Server->Properties->Access->Relay" Check "Only the list below" and add your computer IP address to this list. Any email sent from this IP address will be accepted by IIS SMTP Service even without user authentication.
Handle Undeliverable Email
How does IIS SMTP Service manage undeliverable emails? It saves those emails to specified folder ("C:\Inetpub\mailroot\Badmail"). If you want to receive those undeliverable emails, you can add your email address in "Control Panel->Administrative Tools->Control Panel->Administrative Tools->Internet Information Service->Default SMTP Virtual Server->Properties->Messages"
More Summary
If an email couldn't be sent to specified email address in first trial, IIS SMTP Service would move it to "Queue" folder and IIS SMTP Service would keep on retrying later until expired. You can set expiration timeout of IIS SMTP Service in "Control Panel->Administrative Tools->Control Panel->Administrative Tools->Internet Information Service->Default SMTP Virtual Server->Properties->Delivery"
Special note
Dont forget to change settings "Relay Restrictions" for least SMTP service
Dont forget to change settings "Connection Control" for least SMTP service
Shortcut for IIS admin is goto run and type inetmgr


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