Relaying Not Allowed

Am sure that this is simple stupid: but I need help.
I have 2 machines running 5.5:   mail.x.net, also machine mail2.x.net
I placed a mailbox on mail2.x.net for xyz.com
xyz.com's MX record also points to mail2.x.net.

But when the an email is sent to the mailbox, I get a 
return email saying that mail.x.net (NOT! from 
mail2.x.net) saying that mail.x.net does not allow 
relaying. True mail.x.net machine is in charge of routing - but how do I
get the mailbox to live, be accessed and receive/send mail correctly. 
Mail.x.machine is overloaded with mailboxes - and we are trying to spread
the load.

What I have set up incorrectly?

Other related posts: