I'm also inclined to think that this issue is related to SSL/TLS handling. Email notifications work as expected on my D-Link DCS-932L network camera (using AOL SMTP), while the same email settings fail on my DIR-857. The primary difference between the and DCS-932L and DIR-857 web interface email notification setup page is that the DCS-932L includes settings for SSL/TLS, while the DIR-857 does not.
D-Link DCS-932L Network Camera - FW web interface Email Settings Page
(http://i1207.photobucket.com/albums/bb478/javalawyer/dcs-932l_email1.jpg)
D-Link DIR-857 - FW web interface Email Settings Page
(http://i1207.photobucket.com/albums/bb478/javalawyer/dir-857_email.jpg)