Joe,
TLS requires both sides of the connection support TLS.
In such a case, if the remote server supports TLS then TLS is used, but if the remote server does not then it will use an unencrypted connection to send.
However, if your server's OS does not support TLS (Windows Server 2000/2003 for example) or you do not have TLS bound to any ports in SETTINGS > BINDINGS along with the Path to your SSL Certificate then mail in SmarterMail will hang as it will not be able to know how to negotiate a TLS connection for Outgoing SMTP, in which case the resolution is to disable Enable TLS if supported by the remote server setting.