Linux Mail Server Setup and Howto Guide

Hello everyone,

os: RHEL5

I'm in dire need of some serious insight into using postfix to send SMTP to external users.  I'll start with a symptom that is probably causing all of it.  When I try to telnet localhost 25, I get:

Trying 127.0.0.1…
Connected to localhost.localdomain (127.0.0.1).
Escape character is '^]'.
220 avmlx009.avmind.com ESMTP Postfix
EHLO test.com
250-avmlx009.avmind.com
250-PIPELINING
250-SIZE 10240000
250-VRFY
250-ETRN
250-ENHANCEDSTATUSCODES
250-8BITMIME
250 DSN

I never get the 250-AUTH or (both 250-AUTHs).  Any ideas why ?  My dovecot and postfix settings are below :

dovecot -n:

auth default:
  mechanisms: plain login
  passdb:
    driver: pam
  userdb:
    driver: passwd
  socket:
    type: listen
    client:
      path: /var/spool/postfix/private/auth
      mode: 432
      user: postfix
      group: postfix

postconf -n:

alias_database = hash:/etc/aliases
alias_maps = hash:/etc/aliases
command_directory = /usr/sbin
config_directory = /etc/postfix
daemon_directory = /usr/libexec/postfix
debug_peer_level = 2
html_directory = no
inet_interfaces = localhost
mail_owner = postfix
mailq_path = /usr/bin/mailq.postfix
manpage_directory = /usr/share/man
mydestination = $myhostname, localhost.$mydomain, localhost
mydomain = avmind.com
myhostname = avmlx009.avmind.com
myorigin = $myhostname
newaliases_path = /usr/bin/newaliases.postfix
queue_directory = /var/spool/postfix
readme_directory = /usr/share/doc/postfix-2.3.3/README_FILES
sample_directory = /usr/share/doc/postfix-2.3.3/samples
sendmail_path = /usr/sbin/sendmail.postfix
setgid_group = postdrop
smtpd_sasl_path = private/auth
smtpd_sasl_type = dovecot
unknown_local_recipient_reject_code = 550

postconf -a:

cyrus
dovecot