Data Protection Manager 2007 and DPM 2010 notification emails may not be delivered to the configured list of recipients although individual test mails are delivered successfully (Options -> SMTP Server -> Send test mail). When you try to send a test mail to a group in this scenario you get the following error:
The SMTP server reports that the From address is not valid. (ID: 527)
Check For appropriate permissions to send via SMTP to the specified server.