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Figured it out. Guess I was tired when I was using the WP-Mail-SMTP plugin and didnt try all the combinations.

Here is what you need to do with GoDaddy:
1. Set up an email address in your Hosting account, I used one of my Free Email with domain credits
2. Install the WP-Mail-SMTP plug from here or uSearchIt
2a. Basically you download the file and drop it into your wp-content\plugins\ folder
3. Activate the plugin within WP by logging in and going to the Plugins to activate it
4. After activating the plugin go to Settings – Email
5. Enter the email from step 1 into the “From Email” field
6. Enter your “From Name”
7. Select “Send All WordPress Emails via SMTP”
8. In the “SMTP Host” field enter “relay-hosting.secureserver.net”
9. For “Authentication” choose “Yes: Use SMTP authentication.”
10. In “Username” enter the email address from step 1 again, same as step 5
11. In the “Password” field enter the password you use for the email login (SECURITY NOTE: this is saved in clear text in the UI)
12. Click “Update Options”
13. Test by entering an email address you can access in the “To” box under the “Send a Test Email” section
14. Click “Send Test”

You might received a message that makes it sound like the email failed but when you check you mailbox it should be there. You might also get a message in the mailbox in step 1 that also sounds like the send might have failed, dont worry though if you received it in the other box. Just dont change the settings after it works for retreiving the email.

Here is what I receive in the WP UI when the test message is sent:
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Test Message Sent

The result was:

bool(true)
The SMTP debugging output is shown below:

SMTP -> FROM SERVER:
220 p3smtphosting04-02.prod.phx3.secureserver.net ESMTP
SMTP -> FROM SERVER:
250-p3smtphosting04-02.prod.phx3.secureserver.net
250-PIPELINING
250-SIZE 30457280
250 8BITMIME
SMTP -> ERROR: AUTH not accepted from server: 502 unimplemented (#5.5.1)

SMTP -> FROM SERVER:
250 flushed
SMTP -> FROM SERVER:
250 ok
SMTP -> FROM SERVER:
250 ok
SMTP -> FROM SERVER:
354 go ahead punk, make my day
SMTP -> FROM SERVER:
250 ok 1220684469 qp 31722 by p3smtphosting04-02.prod.phx3.secureserver.net
SMTP -> FROM SERVER:
221 p3smtphosting04-02.prod.phx3.secureserver.net Goodbye.
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Here is what is received by the email address in the To box for the test email:
————————————————————–
Subject: WP Mail SMTP: Test mail to [email protected]
Body: This is a test email generated by the WP Mail SMTP WordPress plugin.
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