Cannot AUTH with sendmail

I have been trying by following various help files to get my sendmail to allow relaying by AUTH, Currently it doesnt relay at all (unless you are in the internal IP range) but when I try to send from another range with a password, I have set up Outlook to use authentication but not secure Auth,
on telnetting to the server I get the following list of codes

250-ENHANCEDSTATUSCODES
250-PIPELINING
250-8BITMIME
250-SIZE
250-DSN
250-ETRN
250-AUTH LOGIN PLAIN DIGEST-MD5 CRAM-MD5
250-STARTTLS
250-DELIVERBY
250 HELP


but it refuses the login attempt, can anyone advise me how to get it to work, as this is really getting on my nerves,
Also is there a way to provide user/pass functionality without using /etc/passwd or /etc/shadow/passwd as I want to allow 3rd parties to use the server but not have shell accounts or valid usernames (as I have multiple domains on the one server.)

Mike.

Some further information, Sendmail is responding in /var/log/messages with the following line
Oct 9 22:56:33 linux sendmail[15080]: unknown password verifier

I have details in the /etc/mail/auth/auth-info

Also BTW it is SuSE 9.1 personal with the rest installed via yast from the SuSE servers.

OK I sorted this out by other means but I thought I should provide the solution incase people have the same problem.

1) there was a line missing from the SASLauthd /usr/lib/sasl2/Sendmail.conf
the mech_list entry was missing.

srvtab: /var/app/srvtab
pwcheck_method: saslauthd
mech_list: getpwent LOGIN PLAIN

2) Suse by default launched saslauthd as -a getpwent
but Suse doesnt use that method and needs to be changed to
-a shadow

you do this by editing /etc/sysconfig/saslauthd and changing the SASLAUTHD_AUTHMECH to shadow

Then you need to create a user account for every user and add an entry in /etc/mail/auth/auth-info for each one
you need a different key for each handy if they all have a different domain

AuthInfo:mydomain "U:myname" "P:mypass" "M:PLAIN"

Then cd .. and run make to hash the db and your auth will work.