Command Center

1.Since I needed this only for development, I ended up using smtp4dev, which is exactly what you need when developing an application that sends emails.
The project description:

Dummy SMTP server that sits in the system tray and does not deliver the received messages. The received messages can be quickly viewed, saved and the source/structure inspected. Useful for testing/debugging software that generates email.

2.hMailServer is the easiest way to get an SMTP service running on Windows 7 and Vista.

http://www.hmailserver.com/documentation/v5.3/?page=howto_install