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Nina,
I will start by saying this is not the only problem you will encounter using a Windows Server. I am on a Windows Server and I can say that I have become quite knowledgeable about what the Windows Servers will and will not handle.
As for your mail settings, I had a similiar problem when first using Xoops, but I found out the following settings in the pic work fine. You just need to know your SMTP host (mail host), username and password.
I host several XOOPS sites on a Windows Server and they all use this setting with little problems.
Please keep in mind that this particular problem is NOT a XOOPS bug, but a general Windows IIS issue. I have trouble running PHP applications as well, but with the help of Google and my web host, I can run most applications with a little tweaking.
HTH!
Dana