If anyone stumbles across this thread, I can happily report a solution. Unfortunately, it involves upgrading to joomla 1.5. (Thankfully for me, my site was fairly simple and migrated easily.)
I downloaded phpmailer 2.0 and then did the following...
1. renamed class.phpmailer.php and class.smtp.php to phpmailer.php and smtp.php respectively
2. edited phpmailer.php, went to line 501, changed class.smtp.php to smtp.php
Next, in phpmailer.php, I added the correct smtp server, port #, changed authorization to "true," and added login and passwords for my smtp server. If the smtp server requires it, you can also activate ssl here (as long as you have ssl installed with php)
In the Joomla admin backend,
Mail from -> email@example.com
From Name -> myname
Sendmail Path (blank)
SMTP Authentication -> Yes
SMTP Username -> smtp host username
SMTP Password -> smtp host password
SMTP Host -> smtp host address
And, what do you know, it works!! I can even use gmail as my smtp server, so long as I enter my gmail address as my username, enable ssl, and use port 465.
I hope my week of hair-pulling helps someone else out there. Moral of the story: if hosting on a Windows server, use joomla 1.5!