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Hi Dmackeybog,
I'm very curious as to why you have choosen to use Apache and Sendmail on a Windows 2003 system instead of using Microsofts own IIS web and SMTP services? I could perhaps understand it a bit better on a Windows NT/2000 box as their implementations of IIS weren't the most secure web servers around, but IIS 6 that is included with the Windows 2003 Sever series is a really great webserver.
Anyway, your choice, just one I find *interesting* considering your choice of operating system. As for the XOOPS SMTP options, there used to be an SMTPAuth bug some time ago, but I thought it had been fixed. When comunicating with the SMTP server it will be communicating on TCP port 25 which is standard for SMTP.