There seem to be two ways to go on this. The simplest is to use DHCP and have e-smith assign your IP and DNS dynamically to the client machines. That worked fine for me at home, since my wireless service provider prefers that clients get their IP and DNS information using DHCP, so my whole system at home - from the server to the client machines, are configured via DHCP. There wasn't a whole lot to configure beyond plugging in and turning on. Under this setup, I never had a problem.
If you have your e-smith clients use DHCP, that is one way (I think) to solve the problem.
At the office, we use DSL on a static IP. This is where I had the problem. So...
I configured the e-smith server/gateway with the assigned IP, DNS addresses, etc, but for reasons that have to do with our firewalling, the client systems could not be configured via DHCP from the e-smith server. I assigned each client machine a static local IP like 192.168.1.70, 192.168.1.71, and so on, and for primary and secondary DNS I used the DNS IP's given to me by our DSL service provider. This worked fine for internet access, but e-smith couldn't resolve xxx.xxxx.mycompany.com/e-smith-manager.
To fix this, I made the local address of our e-smith server (192.168.1.1) the primary DNS address, and the DNS addresses given by our service provider as secondary and tertiary (?) addresses.
... or to put it more simply...
Make sure that you include the local IP address of your e-smith server in your list of DNS servers. It seems to work best when the e-smith server is made the primary DNS, with whatever other DNS servers you are using following as alternates.
Hope this helps.