In order to send from Microsoft Outlook, you need to ensure "My Server Requires Authentication" is checked.
This mail server requires authentication, and it is important that this be checked in Microsoft Outlook.
To ensure this is checked in Outlook, do the following:
Click on File, then Account Settings in Outlook
Click on Email Account
Click More Settings
Select the Outgoing Server Tab
Check "My outgoing server (SMTP) requires authentication"