Make sure you have send authentication enabled.
Go to Tools, Accounts, select that account, Properties, Servers.
Enable the "My server requires authentication" option.
Gary VanderMolen, Microsoft MVP (Mail)
I started using the live email and I cant seem to send emails. I can recieve
them, but when I go to send one it gets rejected and tje error says The
message could not be sent because the server rejected the sender's e-mail
Server Error: 550
Server Response: 550 5.7.3 Requested action aborted; user not authenticated
Windows Live Mail Error ID: 0x800CCC78