On my Win98 box, mine looks like this:
[mail function]
SMTP = mailhost.worldnet.att.net ;for win32 only
sendmail_from = davem@comports.com ;for win32 only
You'll need a valid SMTP server that is accessible from your machine. Since I often use AT&T WorldNet for connectivity, I just set it to AT&T's SMTP server. But anyone outside the AT&T network can't use it. So make sure you've got the right server (e.g., your ISP's).
Dave
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