<p>I'm going to have my website hosted soon on a VPS or dedicated server (with Windows 2008), so I'm trying to plan ahead. I wonder whether the built-in SMTP server that comes with IIS7 is reliable enough for a production server or should I look for an alternative? I heard good things about hmailserver and best of all it's free, do you have any experience with using the bulit-in SMTP on a high traffic website.</p>

<p>Thanks a lot for any suggestions</p>

Maybe sending it via gmail is a good one :P
Ok serious.
IIS7 seems I heard to have some decent improvement.
If that's not doing it, I guess you could try free stuff like mailenable.
(No I can't find the evidence on the improvement on IIS SMTP, people who know about this please comment)
Long term you might end up split it to a linux based smtp though, that gives you some flexibility on server farming if it goes too insane.
And if its for any kind of mass mailing that might trigger spam server blocking, don't ever try to host it together with your other important stuff- you want to keep yourself have a back step if your server gets blocked.