When you setup a mantis with a mercury smtp server, you will be in most cases unable to send emails with another computer than the one where Mantis is installed.
In mercury logs, you will see this message ""554 Invalid HELO format" on valid HELOs/EHLO".It is due to the RFC compliance from mercury which isn't RFC compliant.
Here is the fix :
locate "transfltr.mer" in mercury folder, edit it with notepad or whatever.
Locate this line at the end of the file :
H, "[EHeh][EHeh]LO +[0-9]+.[0-9]+.[0-9]+.[0-9]", R, "554 Invalid HELO format"
comment it out (add # at the begining of the line) restart the mail server then.
If you want to turn mercury into RFC compliant, add this line above the one you commented out :
H, "[EHeh][EHeh]LO +[0-9]+.[0-9]+.[0-9]+.[0-9]+.", X, ""

and voila :-)