Check that the SMTP server accepts email

Follow these steps to simulate what FogBugz does when it tries to send mail. If you see an error at any point, it will likely give you some clues as to what's wrong with the SMTP server.

From the computer where FogBugz is running, open a command prompt (choose Start, Run, type cmd, and click OK).
Type

telnet smtpserver 25

If you get a message that says something like Connect Failed, the SMTP server in question is not accepting any connections. This may be because:
the SMTP server is not running
the SMTP server is configured to reject email connections from the FogBugz machine
If all is well, you will see a message that starts with the number 220 followed by a greeting.
Type

HELO smtpserver

You should see a message starting with the number 250 followed by something glib like "pleased to meet you"
Using the email address configured as "Notification Return Address" in the FogBugz Site configuration screen, type

MAIL FROM:youremail@example.com

You should see a message starting with the number 250 followed by something like Sender ok.
Using the email address you want to send a notification to, type

RCPT TO:email@example.com

You should see a message starting with the number 250 followed by something like Recipient ok.

If you see a message that says something like "Relay Access Denied" -- this means that the SMTP server is configured to refuse any email that is not intended for its own domain. For example if you are sending mail to joe@example.com using an SMTP server at mycompany.com and you see a message about relaying denied, this SMTP server probably thinks you are a spammer. You will need to find an SMTP server that is configured to accept email from the FogBugz machine to its recipients.

Type
DATA

You should see a message starting with the number 354 followed by instructions to enter the email message..
Type
Test message
.

Note that the last line contains a period (dot) alone. This signals that you are done typing the message.
You should see a message starting with the number 250 followed by something like Message Accepted for Delivery.
Type
QUIT

Check that the email was received. If it was not received even though the message was accepted for delivery, there is something wrong with the SMTP mail server.