By default Exchange 2007 will automatically relay emails from clients that authenticate. This is a recommended relay method, however some application may not support authentication.
If you try to send email without authentication you will get SMTP error message “550 5.7.1 Unable to relay”

To enable relay for non-authenticated internal clients:

1. Open Exchange Management Console (EMC) > Server Configuration > Hub Transport > Receive Connectors
2. Click on “New Receive Connector” in ActionsPanel
   • Name: Enter name for your new connector
   • Intended Use: Leave default (Custom)
   • Local Network Settings: Leave default (all available addresses)
   • Remote Network Settings: Remove existing entry and add IP Address(es) of your clients that need to relay.
3. Select your new connector > Properties 
   • Permission Groups (tab): Select Exchange Servers
   • Authentication (tab): Select: Transport Layer Security (TLS) and Externally Secured (for example, with IPsec)

MS Exchange 2007
MS Small Business Server 2008 (SBS 2008)