Currently if your mail server requires authentication you need to directly edit the libs/phpmailer/class.phpmailer.php file. Around line 174 you'll see the following section that needs to be changed:

/**
* Sets SMTP authentication. Utilizes the Username and Password variables.
* @var bool
*/

var $SMTPAuth = false;

/**
* Sets SMTP username.
* @var string
*/
var $Username = "";

/**
* Sets SMTP password.
* @var string
*/
var $Password = "";