Hmm, methinks that a bit more reading on SME might have helped

SME uses TinyDNS in caching mode only!!! On a standard install it is not capable of running as an authoratative (read Public) DNS server for any domain.
There has been quite a lot of discussion here regarding TinyDNS and changing it to run as a public DNS server.
A howto has been cobbled together and I have scripted this to provide both an install (and as important if it doesn't work) an un-install process. Email for the scripts if you want them.
A word of warning, only run a Public DNS if you really have to and are prepared to keep it monitored for attempted abuse.
I would suggest using the free Zoneedit DNS servers to host your domain so they worry about the DNS server security and you get worldwide redundant DNS serving for nothing; all controlled via your web browser.
BTW make sure your ISP is setup as your backup mx and sets up their system to treat your domain as allowed (cos they are not hosting your domain it will otherwise be seen as foreign)
HTH