http://www.sendmail.org/~ca/email/auth.html
 http://efflandt.freeshell.org/sbc-smtp-auth.html  <-- good one

So you want to setup SMTP_AUTH (SMTP AUTH) for Fedora Core 2 for sendmail but you want to use SMTP_AUTH in client mode because you have a SMART_HOST (SMART HOST). This was for sendmail 8.12

 make a file called ||/etc/mail/authinfo||
 AuthInfo:mail.domain.com "U:username" "I:username@domain.com" "P:password"

 edit your ||/etc/rc.d/init.d/sendmail|| script
 look for
 ||for i in virtusertable access domaintable mailertable ; do||
 change it to
 ||for i in virtusertable authinfo access domaintable mailertable ; do||

 edit ||/etc/mail/sendmail.mc||
 add
 ||define(`SMART_HOST',`domain.com.')dnl||
 ||define(`confAUTH_MECHANISMS', `EXTERNAL GSSAPI DIGEST-MD5 CRAM-MD5 LOGIN PLAIN')dnl||
 ||FEATURE(authinfo)dnl||

 restart sendmail and try to send mail to other people