Net::SMTPSyntaxError

Hey guys,
I want to send an email via ROR and I have put this code at the very end
in the config/environment.rb file-

ActionMailer::Base.delivery_method = :smtp
ActionMailer::Base.perform_deliveries = true
ActionMailer::Base.logger = nil
ActionMailer::Base.raise_delivery_errors = true
ActionMailer::Base.smtp_settings = {
  :address => "[my smtp server]",
  :port => 25,
  :domain => '[my domain],
  :authentication => :plain,
  :user_name => 'do-not-reply@example.com',
  :password => '[my password]'
    }

but when i click on send mail button, it shows following error:

Net::SMTPSyntaxError in MailingController#sendmail

502 unimplemented (#5.5.1)

RAILS_ROOT: C:/work/2phone
Application Trace | Framework Trace | Full Trace

c:/ruby/lib/ruby/1.8/net/smtp.rb:680:in `check_response'
c:/ruby/lib/ruby/1.8/net/smtp.rb:582:in `auth_login'
c:/ruby/lib/ruby/1.8/net/smtp.rb:686:in `critical'
c:/ruby/lib/ruby/1.8/net/smtp.rb:581:in `auth_login'
c:/ruby/lib/ruby/1.8/net/smtp.rb:571:in `__send__'
c:/ruby/lib/ruby/1.8/net/smtp.rb:571:in `authenticate'
c:/ruby/lib/ruby/1.8/net/smtp.rb:411:in `do_start'
c:/ruby/lib/ruby/1.8/net/smtp.rb:378:in `start'
c:/ruby/lib/ruby/1.8/net/smtp.rb:316:in `start'
c:/ruby/lib/ruby/gems/1.8/gems/actionmailer-2.0.2/lib/action_mailer/base.rb:586:in
`perform_delivery_smtp'
c:/ruby/lib/ruby/gems/1.8/gems/actionmailer-2.0.2/lib/action_mailer/base.rb:469:in
`__send__'
c:/ruby/lib/ruby/gems/1.8/gems/actionmailer-2.0.2/lib/action_mailer/base.rb:469:in
`deliver!'
c:/ruby/lib/ruby/gems/1.8/gems/actionmailer-2.0.2/lib/action_mailer/base.rb:352:in
`method_missing'
app/controllers/mailing_controller.rb:8:in `sendmail'

Please help me out from this problem, i have got stuck due to this

Thanks

Please also tell me the requirements for sending mail, if i am missing
something. any gems, settings or ...

Thanks