Thanks. I tested it out and yes it does ban relaying to external users (ie e-mail not within the same domain name) but continue to allow mails to be sent to users on the mail server. I wonder if this can be changed.
I also implemented SASL authentication for Outlook based on /etc/passwd. Works like a charm, though initially struggled to get it to work because SELinux blocked access to a socket file used by SASL. Luckily I found some instructions on a site.... I think Postfix?
Now I'm battling with how I can get Dovecot to work in order to have POP since I upgraded to MySQL 5.1 and the libmysqlclient.so.15 has been changed to libmysqlclient.so.16, which is not recognized by Dovecot. I posted another thread here
So many issues just to get something simple to be installed. Wonder when we can be like Windows one day when it's so much easier.