This is how you fix sending in Mail.app using MobileMe account on Lion without worrying about ports and authentication and all that other stuff that is a pain to modify and confuses people that aren't familiar with the terminology:
1. Open Mail.app, go to Mail > Preferences > Accounts, select any MobileMe IMAP account, and click the minus at bottom of column to delete it.
2. Quit Mail.app. To make sure it is actually quit, go to > Force Quit. Force Quit Mail.app.
3. Go to > System preferences > Mail,Contacts,Calendars. Make sure your MobileMe account is on left side, select it, then check mark Mail & Notes on right side. Wait for it to stop spinning.
4. Re-open Mail.app, and send yourself an email. Your MobileMe mailbox will be repopulating, so it may take longer for the initial sending test to process. 😮
➕ I am assuming same issue may occur for the other options contained in the new Mail,Contacts,Calendars System Preferences in Lion such as Exchange, Gmail, Yahoo, and Aol. It appears an old manual configuration causes conflict with attempted configuration from check marking "Mail & Notes" for the account in > System Preferences > Mail,Contacts,Calendars. This prevents proper SMTP server settings from saving.
It would also be nice for someone to reply if they are receiving a SMTP error after updating to Lion for non-MobileMe accounts and if this same process resolves for other accounts.