Warning: mail() [function.mail]: SMTP server response: 553 We do not relay non-local mail, sorry

The following script sends email using mail function . But i am unable to send an email.Upon clicking submit this gets displayed :

Warning: mail() [function.mail]: SMTP server response: 553 We do not relay non-local mail, sorry. in E:\xampp\htdocs\feedback.php on line 19
mail sent successfully

SCRIPT

<?php 
if( isset( $_REQUEST['email'] ) ) {
    $email = $_REQUEST['email'];
    $subject = $_REQUEST['subject'];
    $message = $_REQUEST['message'];
    mail("me@gmail.com" , $subject , $message , "From:".$email );
    echo "mail sent successfully";
}  else {
     echo "<form method = 'post' action = 'feedback.php'>
     Email of sender : <input name = 'email' type = 'text' /> <br/>
     Subject : <input name = 'subject' type = 'text'/> <br/>
     Enter your feedback here : <textarea name = 'message' rows = 15 cols = 40 > </textarea> <br/>
     <input type = 'submit'/>
     </form>";
   }
?>

I am using Apache as php server

Also tell why we have to write $subject , $message i.e with the $ sign in the mail argument , since we have declared $email , $message etc. , just above. Why can't we just write message , email , .. without the dollar sign?