Thanks for your help. One thing I should mention is that when I use mail.mindspring.com as my outgoing mail server in Mail.app, all works fine (EarthLink is my ISP).
I get an appropriate response using telnet as described in the 'Setting up a Site Server' article. This is with the SMART_HOST definition.
I checked out the log file and here's what I get (usernames and system names removed to protect the innocent): I am sending mail using localhost as the outgoing mailserver:
Sep 24 23:25:53 [machine_name] sendmail: g8P6PnQD001647: from=<email@example.com>, size=629, class=0, nrcpts=1, msgid=<A1ABE80A-D04F-11D6-B834-000A27B39884@domain.dyndns.com>, proto=ESMTP, daemon=MTA, relay=localhost [127.0.0.1]
Sep 24 23:27:08 [machine_name] sendmail: g8P6PnQD001647: to=<firstname.lastname@example.org>, ctladdr=<email@example.com> (501/20), delay=00:01:16, xdelay=00:01:15, mailer=esmtp, pri=30387, relay=smtp-mx.mac.com. [126.96.36.199], dsn=4.0.0, stat=Deferred: Operation timed out with smtp-mx.mac.com.