There isn't enough information to say what could be wrong. From what you write it seems that the message is received by MercuryS but not sent on to the destination. Start by verifying that the local domains section of core configuration is correct (read the Mercury help for that section). Using the word "localhost" here is only likely to confuse you, so avoid that. Then send another test message and check Mercury core log and the log of the delivering module (MercuryE or MercuryC) to get more information, switching on session logging temporarily if necessary.

If it after that still isn't obvious what the problem is please post the contents of the mercury.ini file and relevant parts of the logs here, and we might be able to help you figure it out.

/Rolf 

I have installed Mercury (latest version)  Prior to doing so, I was able to send and receive mail without problem from Pegasus Mail.

 After I installed Mercury, I send a test message and Pegasus shows it as having been sent.  When I check in Mercury, it shows it as pending.  I have followed all the instructions to the letter but no luck.

 I have uninstalled Mercury and it is fine. (By the way - prior to installation of Mercury, I used a SMTP client - AuthSMTP - which I paid for on an annual basis)  I have set up SMTP on Mercury as 'localhost'

Before I lose all my hair, can anyone help please?  Running Win XP Pro SP3

Edit:  By the way, Port 25 isn't blocked