brit-dub
There is a button called "Modify corporate DNS settings" on the "Domains" tab that will allow you to set a DNS server address for your SME 7 box.
This entry is intended for use only if you have custom internal/external DNS servers - that is, internal servers serving different numbers than would be returned from a public DNS server, or serving informaiton that is simply not available publicly. For example, your SME box might need to know that "mail.yourdomain.com" is 192.168.3.55 instead of 202.123.45.44 which the rest of the world uses...
Other than that, the SME box is doing DNS by itself - starting with the root servers and working back, and so doesn't need to be pointed to any off-site DNS server.
Can you access the internet by IP address when it isn't working by name? If not, the problem is not in the DNS...