I had the same issue with the SMTP notifications. I had a DNS 323 and when my storage was filled, RAID 1 with two 1TB drives, I bought a DNS 321 with two 1.5TB drives. I didn't need the USB port or bit torrent client and the DNS 321, at the time, was the only inexpensive NAS with firmware support for 1.5TB drives.
So far I've encountered with the DNS 321 the 94% formatting issue, a recurring issue where my DNS 321 just powers down suddenly and without warning, the email alert test failed issue and the disappearing All Accounts check box when creating shares.
I found that the SMTP issue does work but behaves differently. I use my ISP SMTP server and they permit anonymous SMTP relaying. With the DNS 323 these web fields are displayed the same way as those on the DNS 321:
Login Method : (*) Account ( ) Anonymous
User Name : firstlast
Password : emailpassword
SMTP Server : SMTP.isp.com
Sender E-mail : firstlast@isp.com
Receiver E-mail : firstlast@gmail.com
and it worked with these settings for the DNS 323 with firmware 1.05 so I thought, incorrectly, that it would work the same way with the DNS 321 if I just entered them that way as well. I had already updated the DNS 321 to firmware 1.01 so my 1.5TB drives were supported... Finally I found by playing around with the settings I had to check Anonymous to get it to work.
Login Method : ()Account (*) Anonymous
SMTP Server : SMTP.isp.com
Sender E-mail : firstlast@isp.com
Receiver E-mail : firstlast@gmail.com
This does cause other issues, though, as I use the Gmail Checker 1.3 Vista Sidebar for email alerts. The email alerts from the DNS 321 arrive as (Unknown Sender) and do not show up in the Gmail RSS feed. So, though my Vista gadget displays 1 new message it does not show any additional information. I have to click on the 1 New button on the gadget to open a browser window to see who sent the email. It's a nuisance.
Hope this helps those of you with an ISP that permits this kind of relaying. D-Link should add this to their bug list, though, the ability to add a sender display name even though the authentication itself doesn't require a username / password.
I'd also like to note that I've recently updated to the new 1.06 firmware for the DNS 323 and it has this issue as well. I had to set it to anonymous to get it working just like I did with the DNS 321 and just like the DNS 321 the emails sent to the destination address do not contain anything in the FROM: field.