Dizkus

At least on my local network I finally figured out how to make the PostNuke send mail to users using the SMTP server.
I don't know if this is going to help you but you may give it a try if you are setting up PostNuke on your PC.
I set up PostNuke on my company's Intranet and I could not get the password mail to be send to my users.
This is what I did.
Of course I had IIS set up on my computer. Open Internet Information Services through Administrative tools.Right click on SMTP Virtual Server and click Start (if it is not already running).Click on Domains and write down the Default domain name of your server.That is,on the right side of the panel,there is a name yourcomputer.something Local(Default),write that down.
After that,go to the Winnt directory (Windows for XP users) and locate the PHP.ini file.Open it using a text editor and locate the mail function.In the SMTP=localhost value,change localhost with the name you note down before.On the sendmail_from= change it with whatever you want.
Save the file and try it now.It should work.At least it did for me.

I have a definite solution to that check this post:

http://forums.postnuke.com/index.php?name=PNphpBB2&file=viewtopic&p=114973#114973