qmail + mysql + smtp auth = broken

Installed qmail. Patched checkpassword so it will check MySQL first.
Works beautifully. I can add users in MySQL, setup their mailbox, and
they're ready to go.

Now I wanted to add SMTP AUTH. So I went to
http://members.elysium.pl/brush/qmail-smtpd-auth/, downloaded the
patch and patched qmail. Recompiled and installed. Went in my client
(Outlook Express), and checked "My server requires authentication".
Yet when I try to send something, I get this error in my client:

"553 sorry, that domain isn't in my list of allowed rcpthosts
(#5.7.1)"

Also, when I telnet into my server on 25, I get this:

ehlo my.hostname
250-<my message>
250-PIPELINING
250 8BITMIME
auth login
502 unimplemented (#5.5.1)

Very odd... shouldn't it give me a 334? Hmmm...

If I add my IP into the tcp.smtp and issue "qmailctl cdb" it sends it
just fine. It's like it's not even trying to use checkpassword.

Another thing, how do I disable cram md5? My checkpassword client
doesn't support it, and I'm not going to use another one b/c the one I
use uses MySQL on the backend.