Sharepoint Services 3.0, email alerts, and SBS

Hello,
I am trying to get Sharepoint Services 3.0, installed on SBS 2003,
to send email alerts to users (and groups) when a page or section is
updated or changed.

The email server is MS Exchange running on the same box as the WSS.
This is a more or less standard install of SBS with Exchange, etc.

I was getting an error when I added a new user or group to the Lists
and Groups
section on WSS 3.0, and requested the system send an email to the user
or group. (I am logging on as "administrator", not the user).

The error was "I added the user, but could not send email, smtp not
running". I revised the name of the outgoing email server (In
Sharepoint 3.0 Central Admin), and no longer get the "I cannot send
email message", but the user (or group) is not getting the email (?)
Any ideas on what to check,etc.

Thanks

ewholz