raisplin> 1) is it possible to set up sendmail so that it uses user@ip_address 
raisplin> instead of user@domain assuming that the machine it is running on does 
raisplin> not have a FQDN associated with it, and if so, 

You can do that.

raisplin> 2) where would I set this up?

You should do that in sendmail.cf. But it's very compelx. I recommend you to 
use the following tool to build up your own sendmail.cf.

ftp://ftp.kyoto.wide.ad.jp/mail/CF/CF-3.7Wpl2.tar.gz

The author was a Japanese guy, but the tool has enough comments at the 
configuration file. You can find out what I mean when you get the tool.

Good luck.


--KITAMURA