This is probably the most common error thrown by System.Web.Mail. If you get this error, the FIRST THING TO DO, is to write out all InnerException messages.
This will tell you the true error and it will be easer to fix. See Checking the Exception (READ THIS FIRST) for more information.

Although this error message implies there is a permission problem, typically there isn't. However, after trying everything else, you may will want to try the suggestions listed at Error loading type library/DLL.

Now, on to some suggestions:

Suggestion 1
Specify a valid mail server for the SmtpMail.SmtpServer property. If that property is not set, at least set it to 127.0.0.1. For example:

SmtpMail.SmtpServer = "127.0.0.1"

Suggestion 2
If you are using "localhost" or "127.0.0.1" as the SmtpMail.SmtpServer, you may not have permissions to relay through the IIS SMTP Service. To allow access, open up the IIS Admin MMC. Locate the SMTP Virtual Server, and right-click, then select Properties. On the Access tab, click the Relay button. In the Relay Restrictions dialog, grant your IP address (127.0.0.1) to the Computers listbox. Close down all dialogs, and restart the SMTP Service.

Suggestion 3
If you are using "localhost" or "127.0.0.1" as the SmtpMail.SmtpServer, make sure Anonymous access is allowd. To allow access, open up the IIS Admin MMC. Locate the SMTP Virtual Server, and right-click, then select Properties. On the Access tab, click the Authentication button. Be sure "Anonymous Access" is the only checkbox checked. Close down all dialogs, and restart the SMTP Service.

Suggestion 4
The email address does not have a valid TO address. After iterating through the InnerExceptions, you may find this error message actually has to do with relaying. Try sending a test email to an email address that exists on the server specified by SmtpMail.SmtpServer. If you can send an email to that server, then it is a relay issue. Talk to your mail server administrator about letting your code relay through the mail server.

Suggestion 5
Use a real FROM address that exists on the SmtpMail.SmtpServer. Do not use something like "asdf@asdf.com", or some other bogus address as your MailMessage.FromProperty. More advanced mail servers will catch this, and will deny relaying.

Suggestion 6
I have no idea why this suggestion works, but I found it on the web. I figured I would mention it, just in case Suggestion 1 did not work. Instead of specifying

SmtpMail.SmtpServer = "127.0.0.1"

try

SmtpMail.SmtpServer.Insert( 0, "127.0.0.1 or your mail server name here")

Like I said, I don't know why this would work, but here is the thread: http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&oe=UTF8&newwindow=1&threadm=ePdwqQfZDHA.2136%40TK2MSFTNGP10.phx.gbl&rnum=75&prev=/groups%3Fq%3Dcdo.message%2Bgroup:microsoft.public.dotnet.*%26num%3D50%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF8%26newwindow%3