I have a few things for you to consider before the real experts show up to help you. I used Netscape 7.2 to check these settings which I hope are the same for your version. [Later, when this problem is settled, ask about upgrading to Netscape 7.2 or a better browser.]
A first try at solving this problem may be found at
Can't Send Mail.
The problem may be in outgoing server settings. Open your mail window and click on Edit|Mail & Newsgroup Account Settings. Highlight , on each account, Server Settings and click on the button labeled "Advanced." (If needed, click on any + signs to expand the choices.) Be sure that the correct outgoing server is highlighted here. Choosing the "Always use default server" here selects the default server which is determined by a setting discussed below. An invalid choice here will cause mail sending to fail.
To edit the outgoing servers settings, select the Outgoing Server (SMTP) setting normally found below your mail account settings in the Mail & Newsgroup Account Settings window. Selecting Outgoing Server (SMTP) will display the settings for your default outgoing server. You may have only this one server or, like myself, you may have several. Clicking on the "Advanced" button here will allow you to add, edit, delete, or set as default any one outgoing server.
Some postings on the internet suggest that, under certain circumstances, your particular error message is caused by the lack of user authorization for the outgoing mail server. This is enabled by
filling in the checkbox entitled "use name and password." The picture at
this link shows the unchecked box. You may or may not need to fill in the space labeled User Name. A mail password, if required, will be requested when you attempt to mail. Your ISP should be able to supply you with any settings that you are not aware of.
The internet also mentioned this type of problem when certain spam killer or anti-virus programs are used.
Again, if my info does not help you out, then post back for more help and wait for better mail experts. I just took on this request as a late night foray into mail management.

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