Yes, it' completely possible, and relatively easy to configure.
I've got a couple of articles about SmartHosting on my web site that will probably help:
http://www.christopherlewis.com/SmartHosting/SMTPSmartHosting.htm
and
http://www.christopherlewis.com/SmartHosting/SMTPSmartHostingPt2.htm
They're written towards Exchange 2003, but Exchange 2003 used IIS's SMTP engine, so the settings are the same.
Bascially, you right click the SMTP site, select properties, Delivery tab, Outbound security, and enter your credientials in the Basic Authentication fields. Back on the Delivery tab, you then click Advanced and enter the remote SMTP server name in the SmartHost field.