Thanks for your input guys. As I suspected I need to dig a bit deeper. Here is 
the relevant portion of my mail log using Windows Live Mail to send:

[...snip]
Jan 31 07:27:51 vps03 postfix/smtpd[3923]: connect from unknown[IP_REMOVED]
Jan 31 07:27:51 vps03 postfix/smtpd[3923]: NOQUEUE: reject: RCPT from 
unknown[IP_REMOVED]: 554 5.7.1 <user@remotedomain>: Relay access denied; 
from=<dovecotuser@trusteddomain> to=<user@remotedomain> proto=ESMTP 
helo=<HOSTNAME>
Jan 31 07:27:51 vps03 postfix/smtpd[3923]: disconnect from unknown[IP_REMOVED]
Jan 31 07:27:54 vps03 dovecot: imap-login: Login: user=< 
dovecotuser@trusteddomain >, method=PLAIN, rip=IP_REMOVED, lip=IP_REMOVED, TLS
Jan 31 07:27:54 vps03 dovecot: IMAP(dovecotuser@trusteddomain): Disconnected: 
Logged out bytes=712/6487
[...snip]

It seems to me that authentication isn't attempted until after the attempt to 
send fails.

...HOLD THE PRESS

I added the LOGIN auth mechanism to my dovecot.conf and reloaded the service, 
the above was my first attempt to send this message again after doing so (which 
failed). Something must have taken some time to propagate because as I was 
typing this message the client connected again and sent successfully. Looks as 
though you were spot on Noel.

Here is the log snipped for the successful send:

Jan 31 07:35:47 vps03 postfix/smtpd[4049]: connect from unknown[IP_REMOVED]
Jan 31 07:35:47 vps03 postfix/smtpd[4049]: BC1A1152601B2: 
client=unknown[IP_REMOVED], sasl_method=LOGIN, sasl_username= 
dovecotuser@trusteddomain
Jan 31 07:35:48 vps03 postfix/cleanup[4052]: BC1A1152601B2: 
message-id=<FDCB00758C7446F28A755733616C9E39@remotedomain>
Jan 31 07:35:48 vps03 postfix/qmgr[26598]: BC1A1152601B2: from=< 
dovecotuser@trusteddomain >, size=1261, nrcpt=1 (queue active)
Jan 31 07:35:48 vps03 postfix/smtpd[4049]: disconnect from unknown[IP_REMOVED]
Jan 31 07:35:48 vps03 dovecot: imap-login: Login: 
user=<dovecotuser@trusteddomain>, method=PLAIN, rip= IP_REMOVED, lip= 
IP_REMOVED, TLS
Jan 31 07:35:48 vps03 postfix/smtp[4053]: BC1A1152601B2: 
to=<user@remotedomain>, relay=remote_mx_address[IP_REMOVED]:25, delay=0.79, 
delays=0.27/0/0.14/0.37, dsn=2.6.0, status=sent (250 2.6.0 
<FDCB00758C7446F28A755733616C9E39@remotedomain> Queued mail for delivery)
Jan 31 07:35:48 vps03 postfix/qmgr[26598]: BC1A1152601B2: removed

The only question that remains for me is, what is the difference between PLAIN 
and LOGIN mechanisms? I understand from 
http://wiki.dovecot.org/Authentication/Mechanisms that they are both plain 
text. Unfortunately google searches for login authentication aren't 
particularly helpful.

Kind regards,

James Day

-----Original Message-----
From: owner-postfix-us...@postfix.org [mailto:owner-postfix-us...@postfix.org] 
On Behalf Of Noel Jones
Sent: 31 January 2012 04:22
To: postfix-users@postfix.org
Subject: Re: SASL authentication and Windows Live Mail

On 1/30/2012 9:32 PM, Jim Seymour wrote:
> On Tue, 31 Jan 2012 00:30:33 +0000
> James Day <james....@ontraq.com> wrote:
> 
> [snip]
>> ... trying the same account details from Windows Live Mail throws up 
>> a:
>>
>> "554 Relay Access denied" error message.
> [snip]
> 
> IIRC, "Relay access denied" is a symptom of a non-SSL attempted 
> connection/login when "disable_plaintext_auth = yes" in dovecot.conf.

The error message means the mail was rejected by reject_unauth_destination, and 
that means the client didn't authenticate (or tried and failed).

If AUTH was tried and failed, it will be noted in the postfix and dovecot logs. 
 If no failures are logged, AUTH wasn't attempted.

This may or may not have anything to do with SSL/TLS.  Another good guess is 
that dovecot needs to offer LOGIN and/or PLAIN mechanisms.

But we're just guessing here.  We need more details of the connection and 
configuration to give more concrete advice.

http://www.postfix.org/DEBUG_README.html#mail


  -- Noel Jones

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