Hi Jack,
I haven't yet installed SME 5, but I do have e-smith 4.1.1, and I was having similar problems. I think dyndns.org requires you to use their FQDN as your internal domain name before they authenticate you and successfully update your IP.
For example if you have xyzcorp.com as your "dummy" internal DNS domain name, but want myname.dyndns.org to point there, run the setup dialogue and set your internal domain name to be myname.dyndns.org (for lack of a more descriptive domain!).
I hope this helped, because your issue helped me solve mine.
Gavin Goes