The person doc is a manually created user (i.e. not registered) They have a first name, last name, user name, short name, internet pw, "other internet mail" and forwarding address.
Set the mail sending agent to "Run as Web User"
Define the mail message in LS by setting ONLY the ReplyTo and the INetFrom fields in this format "John Smith" <firstname.lastname@example.org>
DO NOT set the Principal, From or SentBy fields.
When the message is received, the value in the From column of the inbox shows John Smith in both Notes and a pop3 account.
Checking doc properties in Notes, the From field and ReplyTo fields are both set correctly to "John Smith <email@example.com> and the SMTPOriginator field is set to firstname.lastname@example.org
Hope this helps someone else.