Setup Local SMTP server for Sitecore local Email test.

Step-by-step guide

1. Go to http://papercut.codeplex.com/
2. Download and install the application
3. Once installed and running, go to the "Options" menu and set IP Address to you local IP address
4. That's it, you can now tell your application to send out emails to your local SMTP server

After this create a .config file for use this:

<?xml version="1.0"?>
<configuration>
  <sitecore>
    <settings>
      <!--Email configuration-->
      <setting name="Analytics.ClusterName" value="{HostName}" />
      <setting name="UseLocalMTA" value="true"/>
      <setting name="SMTP.Port" value="25" />
      <!-- SMTP server address (IP). -->
      <setting name="SMTP.Server" value="{localIpAddress}" />
    </settings>
  </sitecore>
</configuration>

How Setup SMTP email Server for Sitecore

For setting the email server you need to setup some basic config via path config as below:

<configuration xmlns:patch="http://www.sitecore.net/xmlconfig/" xmlns:set="http://www.sitecore.net/xmlconfig/set/">
  <sitecore>
    <settings>
      <setting name="MailServer" value="smtp.gmail.com"/>
      <!--  MAIL SERVER USER
        If the SMTP server requires login, enter the user name in this setting
  -->
      <setting name="MailServerUserName" value="xxx@gmail.com"/>
      <!--  MAIL SERVER PASSWORD
        If the SMTP server requires login, enter the password in this setting
  -->
      <setting name="MailServerPassword" value="xxx"/>
      <!--  MAIL SERVER PORT
        If the SMTP server requires a custom port number, enter the value in this setting.
        The default value is: 25
  -->
      <setting name="MailServerPort" value="587"/>
    </settings>
  </sitecore>
</configuration>

Just ad the below node in web.config at the last but before: