You need to type in a Password for the SMTP option, To do that in 'Mail'
1. Go to the menu bar Mail->Preferences
2. Click on Accounts
3. Edit the .Mac account you are using
4. Make sure that 'Out Going Mail Server:' is 'smtp.mac.com'
5. Click on 'options'
6. Select 'Password' for 'Authentication'
7. Type in your .Mac user name and password.