Cannot send or receive email ('Message not sent. Server replied:)

[joximu]

if you have the same domain in virtual_domains and in $mdomain you'll get a warning/alert in the mail.log.

But the sASL problem is not based on this. Maybe you could do a sewrch in the forum, there was someone with an equal problem - or rbutx can help you.
I'd say: either it's not a fresh debian etch or at least it's not installed as we all do... :-)