I would guess you might have an authentication problem with the sending clients settings.
550 errors mean either you're attempting to use a sending (SMTP) server that
your ISP doesn't own and operate, or you have an authentication (name,
password, "My server requires authentication") setting that's incorrect.
These articles apply to all email clients, not just Outlook:http://office.microsoft.com/en-us/assis ... 31033.aspx
Troubleshoot 550, 553, and relay-prohibited errorshttp://support.microsoft.com/kb/290842/en-us
You receive a SMTP relay blocks error message when you send e-mail messages
You receive a SMTP relay blocking error message when you try to send an
When I send a message I get it returned with a message from System
How do I fix this?
Note that password issues are often due to a malfunctioning AntiVirus email
scanner (and they all eventually WILL malfunction). If you're running one
of these (applies to ALL vendors), disable and/or uninstall the email
scanning features and see if the problem persists.