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UPDATE: There is now an Official Exim FAQ Entry for this, You should use this for best results as the method below does not work on all versions of authdaemon. If you were having issues with Debian and the solution below, look at the comments section for an update from Debian.
I have been meaning to get SMTP AUTH going on my server for a while, there are a few samples I saw that was looking very nasty for getting authdaemon and exim to talk to each other. Eventually Leon got one of my machines to work in a way that I quite liked, this is my current setup in exim 4. All it requires is that the user that exim runs as can read and write to the courier authdaemon socket.

# Unix clients
driver = plaintext
public_name = PLAIN
server_condition = \
${if eq {${readsocket{/usr/local/var/authdaemon/socket}\
{AUTH ${strlen:exim\nlogin\n$2\n$3\n}\nexim\nlogin\n$2\n$3\n}}}{FAIL\n} {no}{yes}}
server_set_id = $2
# Windows clients
driver = plaintext
public_name = LOGIN
server_prompts = Username:: : Password::
server_condition = ${if eq {${readsocket{/usr/local/var/authdaemon/socket} \
{AUTH ${strlen:exim\nlogin\n$1\n$2\n}\nexim\nlogin\n$1\n$2\n}}}{FAIL\n} {no}{yes}}
server_set_id = $1

Very nice and simple, now I can SMTP auth against my SQL and PAM based auth that is in use on my machines. Works well with Outlook and Evolution.