... I think it's a good idea to stick with the vendor-supplied versions of things where possible. I seem to see a security bulletin about sendmail 8.8.x every month these days. The only thing worse than installing a new version of sendmail 8.8.x is installing three new versions of sendmail 8.8.x in three consecutive months. Whereas if you run the SGI-supplied version of sendmail, you can ftp a swmgr-installable patch for security problems, very easy, and probably most of the security problems in 8.6.x have been shaken out by now anyway.
It is possible to configure a sgi-supplied-sendmail-running client to forward everything to the server. Here is a sendmail.cf which does it. It's been sgi-ified, e.g. the uid changed to guest, etc. You should be able to supply values for the first two macros and drop it in. There are a bunch of other things you need to do too, and I'm trying to get around to writing them up. But unix expert types reading this group may be able to cope with most of them other than the creation of the following file. For irix 5.3, be sure you have patch 1477 on the clients (not that installing it on the server too would hurt).
I believe that the lock daemon needs to be running ("/etc/chkconfig lockd on" for future boots, "/usr/etc/rpc.lockd&" for this boot session), both on clients and on the server, but I don't really know about this, it was already running here so I didn't need to investigate further. (The easiest way to see whether it's chkconfig'd on is by "cat /etc/config/lockd".)
Download the sendmail.cf file from http://www.dgp.toronto.edu/~flaps/mail/sendmail/86/sendmail.cf.irix