SMTP Issues with Exchange 2007

I'm having problems sending e-mail through Exchange 2007. We are moving to that from a Lotus Notes system, and SMTP through that works fine. Also, SD has no problem fetching POP mail from Exchange.

The server that runs SD has another program that sends mail. It has no problem sending through Exchange 2007. I show the communication log from that program below. I've tried to set SD's outgoing mail settings to match, but I've pretty much tried every setting I could with no luck.

I also attach the support file. You can see my attempt at the 17:16:03 mark.

Thanks,
Rob

This is the text from the successful mail program

6:59:49 < 220 ltimail.lti.lift-tekelecar.com Microsoft ESMTP MAIL Service ready at Wed, 6 Oct 2010 16:59:48 -0400
16:59:49 > EHLO LTI_com
16:59:49 < 250-ltimail.lti.lift-tekelecar.com Hello [192.168.102.23]
250-SIZE 10485760
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-STARTTLS
250-AUTH
250-8BITMIME
250-BINARYMIME
250-CHUNKING
250 XEXCH50
16:59:49 > MAIL FROM: <edi@lift-tekelecar.com>
16:59:49 < 250 2.1.0 Sender OK
Recipient: rduncan@lift-tekelecar.com
16:59:49 > RCPT TO: <rduncan@lift-tekelecar.com>
16:59:49 < 250 2.1.5 Recipient OK
16:59:49 > DATA
16:59:49 < 354 Start mail input; end with <CRLF>.<CRLF>
356 bytes sent16:59:49 >
16:59:49 >
10418 bytes sent
(EOF)
16:59:49 > .
16:59:49 < 250 2.6.0 <17638e88c6884327909f28539b58ff17@LTI_com> Queued mail for delivery