sendmail help

[Khizkey]

Hi,
Can someone give me an idea of where I am going wrong with my sendmail configuration.
All my mail that I send to my box gets bounced as domain or useer unknown (i've checked and its not blacklisted)

If I have tried everything (including a couple of tutorials).
I'm using RH5.
I have do have DNS turned on (from a tutorial)
My linux box is behind a netgear F/W but port 25 is open.
I have had tried my settings with the linux f/w on and off.

A couple of questions are that may help are these:
I put my FQDN in /etc/hosts with localhost.
127.0.0.1 my-linuxhost.net localhost.localdomain localhost chatamhouse

Do I also need to put a line in /etc/hosts that corresponds to the internal ip: 10.0.0.2?

in /etc/resolv.conf I have the following:
domain my-linuxhost.net
nameserver 127.0.0.1

Should the nameserver point to a real domain?

any ideas will be useful
thanks
K

[Khizkey]

As an update;
I tried using mailx to send a message outside the server and got the following:

----- Transcript of session follows -----
553 5.3.5 mail.chi-linux.net. config error: mail loops back to me (MX problem?)
554 5.3.5 Local configuration error

This is a snipit from the maillog:
May 18 00:27:33 chi-linux sendmail[5153]: m4I5RWfN005151: SYSERR(root): mail.chi-linux.net. config error: mail loops back to me (MX problem?)

I've tried a google of the error message and cannot get a clear picture of where the problem is.
1) with the way I have tried to configure my DNS
or
2) the mx record at godaddy

Any ideas?