Mailbox unavailable. The server response was: 5.7.1 Unable to relay for abc@xyz.com [closed]

Aahh got it... I got it working :)

Thanks Christopher, your suggesion is correct.

But, finding "Default SMTP Virtual Server" was tricky ;)

Even if you use IIS7 to deploy your web site, you have to open IIS6 Manager to configure SMTP server (why?).

I configured SMTP server as follows to make things work:

1. Open IIS6 Manager using Control Panel --> Administrative Tools.
2. Open SMTP Virtual Server properties.
3. On General tab, Set IP address ofthe Web server instead of "AllUnassigned".
4. In Access tab, click on Relaybutton, this will open RelayRestrictions dialog.
5. In relay computers list, add theloopback IP address i.e 127.0.0.1and IP address of the Web server, so that they can pass/relay emails through the SMTP server.

herein lies the answer...IIS Settings

IIS-->Default SMTP Virtual Server-->Properties-->Access-->Relay restrictionsjust add or exclude the IPs you care about, should resolve the issue.

I was facing the identical problem and followed the (very clearly spelled out) steps in Vinod's reply, however this then created a different error:

Unable to read data from the transport connection: net_io_connectionclosed

I did a bit more digging and poking around and (while I'm not sure why this worked) I solved it by:
- Going back into IIS6.0 management console
- Open SMTP Virtual Server properties
- On General tab, changing the 'IP Address:' setting back to '(All Unassigned)'

Not sure why this works, but hopefully will help out someone facing the same problem in the future.