Generally, for a networked machine (e.g., Athene) that is not acting as a mail server, but using a remote smarthost (SMTP server) to send email, yet still delivering email locally (which is obtained using fetchmail, for example, from an IMAP server) you will choose option 2.
The information you then supply is:
visible name: athens.togaware.com other names: none domain rely: none network relay: none smarthost: mailhost.togaware.com root email sent to: kayon
This means that
mailhost.togaware.com is used for sending
email. Any email sent from Athene to an unqualified address
@) will have
to it and delivered locally.
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