Ok I've never tried sending mail via telnet before but following that article and trying
MAIL FROM:firstname.lastname@example.org gives me the following error
454 5.7.3 Client does not have permission to submit mail to this server.
I don't know why this is as I it all appears to be setup to accept all mail!
Update: I tried this from a machine on the local network, from my XP box and from the server directly using telnet in cmd prompt. All gave the same result. Any ideas?