Error messages break AJAX / debug is spit out directly

The solution is to use:

ob_start();
// Run PHP Mailer functions here ...
$errors = ob_get_contents();
ob_end_clean();
if ($errors != '') {
  drupal_set_message($errors, 'error');
}

That way phpmailer does not need to be changed and the module does no longer breaks on AJAX.

Setting to "needs work" as someone should make a patch out of above code snippet.

Changing title to reflect that this will be a solution also for:

#1085668: Debug prints outside D7 admin overlay

I am having this problem as well. The README.txt file for this module states:

This module no longer uses the PHPMailer package as an external library, instead
a slimmed down version of the library have been relicensed and integrated with the
smtp module.

It looks like the PHPMailer library has already been patched to use t() for translatable strings, so it would seem that patching the library to log errors correctly shouldn't be a concern.

I've attached a patch that modifies smtp.phpmailer.inc to log errors to watchdog instead of printing them to stdout.

Thanks for this, echo was ugly.

Here is patch against latest 7.x-1.x branch with implementation of new logging select field from https://www.drupal.org/node/1937416.

Updating the patch to reflect changes in #1937416-18: Watchdog logging verbose settings

This will have to wait until someone has reviewed #1937416-18: Watchdog logging verbose settings

Still RTBC, other patch is RTBC, too.