PHPBB uses its own SMTP engine, which does support SMTP AUTH.
Right. But like sendmail, you need a real postbox with acces to the SMTP server. And not only webmail/HTTP mail.
If Hunters ISP have only Webmail, he can only use a lokal SMTP-server like Mercury. And with Mercury he can use the normal mail() function via SMTP.
But, if you send your mail from a local SMTP - server and a dial-up line, many mailserver on the internet blocks such mails.
So I think it's a good idea to use sendmail and a real postbox, from the ISP or freemail like GMX, with SMTP access.