All e-mail addresses are valid.

I recieve spam on all of them daily :/

and as I stated before.. I recieved the "test" message in the SMTP configuration area, so that's not really the issue.  Seems somewhere in DNN, it fails on this valid e-mail check EVEN when they are valid e-mail addresses.

what is your sender's email address, does it contain any special characters? Has the portal admin's email set up correctly?

Senders e-mail was my own personal e-mail address.. no special characters.. infact.. all lower case.. and all.. , the portals admins is mine, I was logged in as portal admin when trying to use the newsletter functionality.

Is there a way for my hosting service to block the "valid e-mail address" process? 

I've received test messages beofre, and I beleive even from the "feedback" module (will recheck that).

Thanks for the time and input on this, I know it's hard to debug something when you can't get your hands on it.