Like a few people, I updated to iOS 5 recently and immediately fell prey to a minor bug in the sending of mail.
Based on the default SMTP settings “p07-smtp.mail.me.com” I was consistently getting a ‘Connection to outgoing server failed’ message…. Meanwhile receiving emails was fine.
This work around worked for me, adding an additional smtp server “p04-smtp.mail.me.com”. Don’t forget to include your new @me.com email and usual apple password when you set it up.
Best of luck.