Did you try a test, using Maintenance > Diagnostics > Email (in the admincp)?
And if that fails, then check Settings > Options > Email Options and see what "SMTP Email" is set to. If it's 'Yes', then you want to make sure you have the rest of the "SMTP" options correct (contacting your host if necessary). If you have 'No' for SMTP Email, then it could be that your host doesn't allow that and you need to use an SMTP server, in which case you'd have to ask you host about that.
In general, you'd want to ask them if your vbulletin can send out email directly or if they require you to use a SMTP server, and if so what are the settings for that.
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