Hi,
Please first check if you can send email from web mail. If problem continues in web mail, you'll need to contact your ISP to get further assistance.
If it works as expected in web mail, it means the problem is related to Outlook side. In this situation, please make sure your SMTP settings is set correctly. See:
http://support.microsoft.com/kb/287532
If you installed any antivirus software, please try to temporarily turn off them and test again.
Besides, this issue may be caused by some other reasons, please refer to the following KB article for more details:
http://support.microsoft.com/kb/813514
Hope this helps.
Regards,
Steve Fan
TechNet Community Support