In the Add/Edit Action window in the SMTP server tab, there should be a check box that says "This SMTP server Requires Authentication." If you check that box, you'll open up the frame for Username and Password.
Hope this helps.
Thanks, the setting was right where you said it would be.
Strange though that it's a 2 step process to set it up - set up the action, then edit it for the usr/pwd setting...