Symptom
Your Internet service provider will not accept outgoing email (SMTP) after upgrading to Mac OS X 10.2.
Note: The ".local." hostnames are assigned by Rendezvous. Client computers connected via NAT have IP addresses beginning in 10, 169, or 192. NAT connections may be provided by an AirPort Base Station, a third-party router, or Internet Sharing. It is also known as IP masquerading, or just connection sharing.
Solution
Update to Mac OS X 10.2.1. For more information, see technical document 107036, "
Mac OS X: About the Mac OS X 10.2.1 Update".