I would first ensure that your mail server does not require SMTP authentication. That might be one problem. If it does not, I would open a case with technical support.
As for creating an email alert, click on the alert icon and then select configurations. Click on the plus icon which will open a new window to define a new alert. From here you can name the alert and then select filters. The filters allow you to tell SCSP exactly which fields in the database you want to use and what data you want to look for. Please see the "Managing Alerts" section of the SCSP Admin Guide (which is included on the installation CD) for more details.
Thanks.