Sendmail smtp auth configuration ss really simple to do, took a while to figure out though, because 99% of walkthoughs on the net are BROKEN!!!!!!
This is the simple walk through by me :). This is all based on a redhat/fedora system, using RPMS via apt-get !!!
You will need to install sendmail, sendmail-cf, and cyrus-sasl to get this working, so do the appropriate apt-get commands.
apt-get install sendmail;apt-get install sendmail-cf;apt-get install cyrus-sasl
Here is my sendmail.mc file Included in it, are 3 changes that are required for smtp-auth.
TRUST_AUTH_MECH(`DIGEST-MD5 CRAM-MD5 LOGIN PLAIN')dnl
define(`confAUTH_MECHANISMS', `DIGEST-MD5 CRAM-MD5 LOGIN PLAIN')dnl
define(`confAUTH_OPTIONS', `A')dnl
No Changes in sasl needed to be done, I just simply turned it on.
service saslauthd start;chkconfig saslauthd on
BOOM Done. Now make sure your /etc/mail/access file only has local host information and you should be ready to go.