I found this fix .... It worked for me - thanks to Tom359 on MacRumours... I did tweak his instructions for clarity - but credit to Tom
-Go into Settings, Mail, Add Account
-Create a new account...don't pick any of the pre-named ones. Pick "other"
-click "add mail account"
name: yourname
Address; you@anotheremail.com (ie not me.com - as this will be the sender id on outgoing mail)
incoming server info:
host: pXX-imap.mail.me.com (see your icloud account)
user: yourname@me.com
passwd: for cloud
On the bottom of the screen you will see an area for an outgoing SMTP server.
outgoing
smtp: your.smtp.other.com (whatever that is for your other account)
username: for the outbound account (usually your email - but not always)
password: for the outbound account
Once it validates, go back and disable mail on your original iCloud account.
Works perfectly for me. I get everything pushed to me by iCloud, but my replies look like they came from me@mydomain.com, just like I had it set up with MobileMe.
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iphone working - will try similar fix in morning to make iMail play ball.