1and1 usually give the SMTP server as auth.smtp.1and1.co.uk, however, you should use auth.smtp.oneandone.co.uk (words instead of numbers). The 'username' and 'password' fields should be empty and the 'Username and Password Required' box unticked. Update your site after changing it.
If that doesn't work then try 'localhost' (without the apostrophes) as the 'SMTP Server' name.
If that doesn't work then try 'localhost' (without the apostrophes) as the 'SMTP Server' name.