This came up in a discussion last week and  I could see this being an issue for many customers in Higher Education.  When MOM 2005 sends alerts via Email to attempts to authenticate using NTLM.  If NTLM is not available or if the server is set to relay anonymously the message fails to send.

This support article describes a registry key to send the Email without requiring authentication.

http://support.microsoft.com/default.aspx?scid=kb;en-us;885741