"I think you're right - it is strange how no password is required when accessing an smtp server? But in order to recieve, you do."
This is because when you send, the server just checks your account name against the list of authorized users and if it's there, sends it. However, more and more servers are requiring passwords to send, to prevent spammers from guessing an account name and using the email service for their own ends.
To receive, well, anyone who's ever received an email from you probably knows your account name (it's usually the same as your email addy). So obviously, you need to check the password to prevent people reading email they aren't supposed to.
Rose/Miros