A Smart Host in SMTP mail lets you control how your mail is delivered. This is ideal for a larger site that has one server for its website, and another for its SMTP mail.
First, what is a smart host? A smart host is a server that will handle delivering all your mail for you. Processing bounce-backs, retries and general mail delivery can be very processor-intensive for a server. Especially in modern times with millions of spam messages, a server can easily get overwhelmed with mail processing tasks and not have enough time left for normal web serving. For many websites, it is critical to put those mail functions on a secondary mail server.
But then how do you get your website to send mail out, via ASP? The answer is with a smart host setting.
First, set up the secondary mail server with the mail software of your choice. I use MailEnable, but there are many packages out there that work quite nicely. Make sure it is set to accept relays from your main web server's IP address.
Now it's time to have your webserver point at this mail server as a smart host. Go into your SMTP mail settings. In the DELIVERY tab, click on the Advanced button. In the middle of this form is a location to put in the smart host IP address. Be sure to put brackets around it so get it to evaluate more quickly.
Do not click the 'attempt direct delivery' box. That would tie your webserver up with trying to deliver the mail itself.
Then stop and restart your server, and run some tests. Your webserver should now be much faster - as it sends all mail off to the mail server to be handled there!