Allowing Sharepoint to relay email through Exchange

I have written a Sharepoint 2007 web part that sends a field from a form to a specified email address.

I have got the form working as I require, but at present it can only send to internal email addresses. Sharepoint's email functions use SMTP to send to our Exchange 2003 server, but because our Exchange server is configured to prevent relaying, if the To: address is not at a local domain, it won't deliver the mail.

I don't want to open up our Exchange server to be a completely open relay. What I want is to allow my Sharepoint servers to send mail to addresses outside our domain.

The following seem possible:

• Allow all mail sent from one of the Sharepoint servers to be relayed
• Allow all mail from a web application pool account to be relayed (I am not sure that the application pool authenticates to the SMTP server though)
• A combination of the two

Can anyone advise on the best way of doing this? Is setting up a dedicated SMTP server on the Exchange server (not a separate physical server) the right way of going about this?

EDIT: Note this is for Exchange 2003. There is a post on setting this up in Exchange 2007 which appears to have recognised the frequent requirement to do what I need. It doesn't give much detail on 2003 though. Can anyone expand?