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Here is the sample of the code that I have been using to send emails vai Exchange 2003 using WebDAV.
Domain user that authenticates  against mailbox need to have permissions to access webmail.

	   static void Sendmail(string server,string alias,string password,string domain, string to, string subject,string text)
        {
            System.Net.HttpWebRequest PUTRequest;
            System.Net.HttpWebRequest PUTRequest1;
            System.Net.WebResponse PUTResponse;
            System.Net.WebResponse PUTResponse1;
            System.Net.HttpWebRequest PROPPATCHRequest;
            System.Net.WebResponse PROPPATCHResponse;
            System.Net.HttpWebRequest MOVERequest;
            System.Net.WebResponse MOVEResponse;
            System.Net.CredentialCache MyCredentialCache;
            string strMailboxURI = "http://"+server+"/Exchange/";
            string strSubURI = "http://" + server + "Exchange/";
            string strTempURI = "http://" + server + "/Exchange/";
            string strServer = server;
            string strPassword = password;
            string strDomain = domain;
            string strAlias = alias;
            string strTo = to;
            string strSubject = subject;
            string strText = text;
            string strBody = "";
            byte[] bytes = null;

            System.IO.Stream PUTRequestStream = null;

            try
            {
                // Build the mailbox URI.

                strMailboxURI = "http://" + strServer + "/exchange/" + strAlias;

                // Build the submission URI for the message. If Secure
                // Sockets Layer (SSL) is set up on the server, use
                // "https://" instead of "http://".

                strSubURI = "http://" + strServer + "/exchange/" + strAlias +
                           "/##DavMailSubmissionURI##/";
                // Build the temporary URI for the message. If SSL is set
                // up on the server, use "https://" instead of "http://".
                strTempURI = "http://" + strServer + "/exchange/" + strAlias + "/drafts/" +
                               strSubject + ".eml/";

                // Construct the RFC 822 formatted body of the PUT request.
                // Note: If the From: header is included here,
                // the MOVE method request will return a
                // 403 (Forbidden) status. The From address will
                // be generated by the Exchange server.
                strBody = "To: " + strTo + "\n" +
                         "Subject: " + strSubject + "\n" +
                         "Date: " + System.DateTime.Now +
                         "X-Mailer: test mailer" + "\n" +
                         "MIME-Version: 1.0" + "\n" +
                         "Content-Type: text/plain;" + "\n" +
                         "Charset = \"iso-8859-1\"" + "\n" +
                         "Content-Transfer-Encoding: 7bit" + "\n" +
                         "\n" + strText;
                // Create a new CredentialCache object and fill it with the network
                // credentials required to access the server.
                MyCredentialCache = new System.Net.CredentialCache();
                MyCredentialCache.Add(new System.Uri(strMailboxURI),
                "Basic",
                new System.Net.NetworkCredential(strAlias, strPassword, strDomain)
                );

                // Create the HttpWebRequest object.
                PUTRequest = (System.Net.HttpWebRequest)HttpWebRequest.Create(strTempURI);
                // Add the network credentials to the request.
                PUTRequest.Credentials = MyCredentialCache;
                // Specify the PUT method.
                PUTRequest.Method = "PUT";
                // Encode the body using UTF-8.
                bytes = Encoding.UTF8.GetBytes((string)strBody);
                // Set the content header length. This must be
                // done before writing data to the request stream.
                PUTRequest.ContentLength = bytes.Length;
                // Get a reference to the request stream.
                PUTRequestStream = PUTRequest.GetRequestStream();
                // Write the message body to the request stream.
                PUTRequestStream.Write(bytes, 0, bytes.Length);
                // Close the Stream object to release the connection
                // for further use.
                PUTRequestStream.Close();
                // Set the Content-Type header to the RFC 822 message format.
                PUTRequest.ContentType = "message/rfc822";
                // PUT the message in the Drafts folder of the
                // sender's mailbox.
                PUTResponse = (System.Net.HttpWebResponse)PUTRequest.GetResponse();
                // Create the HttpWebRequest object.
                MOVERequest = (System.Net.HttpWebRequest)HttpWebRequest.Create(strTempURI);
                // Add the network credentials to the request.
                MOVERequest.Credentials = MyCredentialCache;
                // Specify the MOVE method.
                MOVERequest.Method = "MOVE";
                // Set the Destination header to the
                // mail submission URI.
                MOVERequest.Headers.Add("Destination", strSubURI);
                // Send the message by moving it from the Drafts folder of the
                // sender's mailbox to the mail submission URI.
                MOVEResponse = (System.Net.HttpWebResponse)MOVERequest.GetResponse();
                Console.WriteLine("Message successfully sent.");
                // Clean up.
                PUTResponse.Close();
                MOVEResponse.Close();
            }
            catch (Exception ex)
            {
                // Catch any exceptions. Any error codes from the PUT
                // or MOVE method requests on the server will be caught
                // here, also.
                Console.WriteLine(ex.Message);
            }
        }