Do you have "SMTP Email" set to yes or no? A few people have been having problems with it set to "no" because their host recently stopped allowing mail to be sent directly from a php program (you wouldn't happen to have GoDaddy as your host, would you?). If that sounds like the problem, I'm not sure what the solution is - you should probably contact your host and talk to them about it.
Edit: From WHOIS it looks like you do use GoDaddy. I did a search and came up with a page from their support site where someone asked about this. According to that page, you should be able to set (in the adminCP) "SMTP Email" to Yes and "SMPT Host" to "relay-hosting.secureserver.net" (or contact them, if you prefer to make sure).
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