I've been using Zoho on an iPhone 4 for about a year and have never been able to send an email from the iPhone Mail app.  I always got the following error message:

 

The user name or password for "SMTP:[my username here]@ zoho.com@smtp.zoho.com" is incorrect.

 

But I finally found the fix today.  Apparently, iPhones/iPads don't like smtp passwords with special characters, like #, %, &, etc.  I logged into my Zoho account online and changed my Zoho password, then I updated the password in the Zoho email settings for Incoming Mail Server and Outgoing Mail Server on my iPhone, and viola, outgoing email works!

 

Hope this helps someone.

 

Cheers!