For all those using Wordpress 2.8 and having this really frustrating Fasthosts issue, adding this code (changing youremail@defaultfasthosts.com to your default Fasthosts email address) works in the config.php file. Thank you Truthmedia, who made the suggestion.
For anyone looking for a new host for Wordpress, I'd recommend something other than Fasthosts. Spent hours on teh phone with them trying to resolve this, was cut off twice and they just didn't understand the issue. I was also told that, although they recommend Wordpress, that it was also not guaranteed to work on certain hosting packages.
I have no idea of any security implications by putting this in the config file. Advice from anyone?
function wp_mail( $to, $subject, $message, $headers = '' ) {
$email_from="youremail@defaultfasthosts.com"; // Make sure this is a fasthosts hosted email address
$email_to = $to;
ini_set("sendmail_from", $email_from);
$email_subject = $subject;
$email_headers = "From: $email_from"."\r\n"."Reply-To: $email_from"."\r\n";
$email_message= $message;
$sent = mail($email_to, $email_subject, $email_message, $email_headers, "-f".$email_from);
return $sent;
}