I reconfigured the php.ini with smtp=mail.isp.com, like i did in outlook. and i keep having the same problem: Failed to connect in... i'm using phpdev4, thanks.
Try upgrading to php-4.0.6 or php-4.1.* instead of using a dev-version. Also your isp's smtp server might require a username/password which the php.ini does'nt ask for.