SMTP auth sending problem

System: RH 7.3 W/qmail

Admin software PLESK

When I set up the email server to require authentication when sending email, it will prompt for user name password and even with the correct information, it will not send. It keeps asking me for username/password. It works for POP3. However, when I turn off authentication on the server, mail is sent without any problems.

This is how I am forced to leave it so we can use it, but this is security hole I prefer to close.

Any ideas why I cannot set a mail client to send mail authenticed.

Shut it off in PLESK. Under Server>Mail