[exim] mail just ends up in the queue

Hi

I'm new to Exim 4 and have been trying to get it working in a test
environment.
I am using the default configuration file and trying some basic tests by
telneting to port 25 and also injecting a message using exim itself.
All mail goes straight to the 'input' queue and never gets delivered.
However if I run 'exim -M' against the message id, then the message is
delivered. I have tried a few modifications to the config such as
sending all non-local queries to another server.

I'm floundering a bit trying to determine why the mail isn't delivered
immediately so I'd appreciate if someone could help.
I built exim myself and specified that EXIM_USER=exim
I am running the daemon using 'exim -bd -q5m' as root, but it switches
to the exim user. I hope this is right!
Note, exim -HUP kills my process dead.

Thanks for you help.
Martin