no, he's not wrong.
In UE for the SMTP Server section, there are 2 options:
*Mail (This is the one you are using which uses the Sendmail Protocol)
*Pear Mail for SMTP
for the from address you are using the the entered address from the form, Most hosts require that the from address be a valid email address for your domain. instead of a dynamic address, you should use a static address for the from address.
if you click the from button in the universal email settings, you can use the dynamic address for the reply to address