Ciao Craig,
if you execute a netstat command, eg.
netstat -a | less, did you see a listening 25 port on localhost?
You must see something like this:
tcp 0 0 localhost:smtp : LISTEN
Also, execute the following command:
service sendmail status. What's the output?
You must see something like this:
sendmail (pid xxxx yyyy) {color:#339966}is running...{color}
I try a fresh install right now, following the "getting starded" guide, and work. I can telnet and I can send notification, so I'm sure about the instructions.
Ciao
gianluca