have you actually verified your sending address in your yahoo web account? ie had them send you a special mail to verify it actually works? Sounds silly, but they made me do it years ago.

It sounds silly I am sure but there were 2-3 space characters after my email address as it was written in the 'Email Address:' box in account settings. After removing the blank space characters transmitting email seemed to work. It seems that the query for my account password from the yahoo email server was getting my password and the email account name appended with 2 spaces and it choked on it. I just find it curious as to why I was able to receive mail though. Problem solved thanks much.

When you send mail the field you mention is used to populate the "ReplyTo: fild in the mail header. Otherwise it has no purpose and setting it to nothing will also work.

Yahoo are obviously checking that field as you send mail. that is points to a valid address, and I have a sneaking suspicion that is might be required to point to your yahoo mail account.

Historically the"Nigerian" type scam emails used a replyto address completely different from the one used to send the mail. So even if the sending account was closed down they still got the replies. The mail quite commonly originated in Yahoo and replied to Hotmail accounts. So I guess they have a check to try and discourage that legitimate, but undesirable from their perspective, use.