SENT MAIL REJECTED - INVALID HELO NAME

I've migrated a Leopard server to a new Snow Leopard installation (essentially from scratch).

Sent mail is bouncing from a few recipients servers, with the following message:

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Reporting-MTA: dns; myserver
X-Postfix-Queue-ID: 0D72E5ADCD0
X-Postfix-Sender: rfc822; user@mydomain.com
Arrival-Date: Mon, 15 Feb 2010 12:55:41 +1000 (EST)

Final-Recipient: rfc822; recipient@anotherdomain.com
Original-Recipient: rfc822;recipient@anotherdomain.com
Action: failed
Status: 5.0.0
Remote-MTA: dns; anotherdomain.com
Diagnostic-Code: smtp; 550 Access denied - Invalid HELO name (See RFC2821
4.1.1.1)
Received: from localhost (localhost [127.0.0.1])
by myserver (Postfix) with ESMTP id 0D72E5ADCD0;
Mon, 15 Feb 2010 12:55:41 +900 (EST)
X-Virus-Scanned: amavisd-new at local
Received: from myserver ([127.0.0.1])
by localhost (myserver.mydomain.com) [127.0.0.1]) (amavisd-new, port 10024)
with ESMTP id jFGIuUsw-Gqh; Mon, 15 Feb 2010 12:55:39 +1000 (EST)
Received: from [192.168.1.5] (unknown [192.168.1.5])
by myserver (Postfix) with ESMTPA id D64025ADC79;
Mon, 15 Feb 2010 12:55:39 +1000 (EST)
Subject: my subject
Mime-Version: 1.0 (Apple Message framework v1077)
Content-Type: multipart/alternative; boundary=Apple-Mail-79-132531051
From: Mr. Sender <sender@mydomain.com>

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The Snow Leopard is set up the "same" as it was previously, but we didn't have this problem before.

In Mail>General>Domain name is "local" and Hostname is "myserver". Should the Hostname be changed to the Domain name?

Message was edited by: Brian Guam Engineer