SME 7, by default, has an "SMTP Proxy" enabled that will swallow all outbound SMTP traffic from LAN clients and then handle delivery.
If your ISP is blocking outbound traffic on port 25, as I know Cox, Comcast and Earthlink do here in the Washington, DC area, installing a SME will result in no email delivery until you either a) Disable the SMTP Proxy or b) configure the SME server to deliver all email through the ISP's mail server.
In order for the SME to relay through the ISP you may need to configure 'outbound SMTP authentication'. Without this, many ISPs will give you 'unable to relay' messages.
One more "gotcha": If you gave your SME server the "real" domain for your users, then it will swallow all emails locally, so that email from user1@my.local.domain to user2@my.local.domain will never leave your network - they will be handled internally by the SME server.
So:
* If you want your users to relay email directly through the ISP smtp server, you need to disable the SMTP proxy (server-manager::Security::Proxy settings)
* If you want the SME to intercept all outbound emails, then deliver them to the ISP mail server, you need to correctly configure outbound SMTP authentication (server-manager::Configuration::E-mail::SMTP Authentication for Internet provider) and you need to have your domain names configured correctly in order to get email delivery to behave as you desire.
Hopefully these ideas will give you enough info to proceed; if not, let us know!
[edit]
I just re-read your post, and started wondering if your DNS is healthy? If you changed something in the DNS it might take up to 3 days to "kick in", which could make resulting problems hard to diagnose.
When checking DNS for a SME network, be sure to check both locally (from the SME server) and remotely (from an external DNS server such as 4.2.2.1) to make sure everyone agrees on what should happen to your traffic...
[/edit]