Your mail server is blocking you from sending messages to email addresses outside the mail server domain. For example, if the mailserver domain is mycompany.com, you can send to
jack@mycompany.com and
jill@mycompany.com but you cannot send to
jack@yahoo.com. This relay control is an admin option on your mail server. You can change it if you hav admin access, otherwise you will have to test using addresses only in the mail server domain.
-Rob Wunderlich