There are many freeware and shareware smtp servers that can be downloaded for Windows, Linux, and Unix systems. Google searching provides many leads.

If you download a smtp server for windows, you could then add user acounts, and use the "SMTP AUTH" you talked about earlyer because now you have an acount. The servers ip would be 127.0.0.1 or you could use telnet localhost 25

you would no longer get these relaying prohibited.

If servers openly alowed anyone to connect and send mail, this contributes to the spam we recieve.

Note: Many operating systems such as WinXP come with such services as smtp, ftp, httpd... and can be enabled and configured.