George,
although I am not at all an expert, my installation is as follows (and it works now with sendmail:)
set the hostname in /etc/hosts, eg.:
127.0.0.1 localhost
192.168.1.1 myhostname
set the hostname in nsdconfig.tcl:
# set hostname [ns_info hostname]
set hostname "mywebsite.dyndns.com" [1]
As fas as I remember, I didnt change the sendmail.tcl
And of course, you have to be sure the sendmail daemon is running...
([1] In my installation, the host is part of an intranet LAN, but is also accessed from the "outside" internet via a router by portforwarding and a dyndns provider. (This makes it quite cheap to have a public website using a dsl flatrate). In this case, the hostname in the nsdconfig.tcl is set to the public hostname given by the dyndns ("mywebsite.dyndns.com"), otherwise mails sent from the system would have the "internal" hostname as sender, which makes no sense to the public. Of course, all this stuff may not apply if you only use your openacs installation in either intranet or internet.)