I am trying to send mail to other machines without using some else's smtp server. In the end I want to send server logs to an account on a seperate but local mail server.

Kubuntu Jaunty
apt-get postfix
dpkg-reconfigure postfix
apt-get mailutils
mail user@host.domain
mailq or more /var/log/mail.log
I either get Connection timed out or No route to host
or Host not found, try again

Some errors are from trying to email external servers which might be prevented because ISP's block it I think. telnet ip port 25 doesn't work
But telnet works for the local ones

I can browse the web so dns should be okay.
Does postfix read the hosts table first?
I can ping the host I put in hosts table
But postfix says Host not found

Your query is not clear

If you are creating an MTA to send mails to outside world
There are a few things to keep in mind
1. If you send the mail as-if appearing from your system, most of the SMTP mail servers will reject your mail
as the mail server from which mail is originating must
a) have a static ip address
b) must be reverse-resolveable by name.
However, you can ask your service provider to give you an smtp server to which you can do a smart-host transfer

If you are trying to send mails locally, internally to systems:
Just by adding the host name in the hosts file and sending mail abc@host.dom will not work.
The mx record for the domain/host must be resolve'able.
You might want to take a look at the SMTP RFC to understand more and also read-up on DNS MX records.

Best way to test if networking is correcty set on your mail server is to do following:

In terminal type like this: to see if your system is corectly resolving domain names (corectly set up DNS servers) you should get something like this:
Take notice on the we got 5 mail servers for "gmail.com" domain. next try to get ip for one of them:
. Part of the response is:
This means that you can resolve other mail servers from your server, and that you should follow steps bhaslinux wrote.

I as ISP, I block ANY connection originating from my network that has destination post 25 with IP other then my mail server's. This is to prevent SPAM-ing and blacklisting my IP with other mail servers arround the world. Also, I have active "reverse-resolveable by name" protection bhaslinux mentioned, so any connection from IP that has no reversed DNS record is blocked, like this:
or that is already reported by someone as SPAM-er: