Email function not working

For some reason, my multisite install is not sending emails for users with a different domain. In other words, if a user registers with the an email address that has the same domain as the site, the email goes through just fine. However, if a user registers with a different email domain, they never receive an email to complete the registration.

If I manually add a user with a different domain email address, they get the following error when trying to reset the password.`The e-mail could not be sent.
Possible reason: your host may have disabled the mail() function…`

I’ve set all the emails on the main site as well as the network settings to an actual email address that I use. But any emails that are sent out are from a “noreply@domain.com” and not the changed email address that is on the settings page. Also, I’ve created a new email address that corresponds with the “noreply@domain.com” with no luck. Even using the WP-SMTP email plugin seems to get me nowhere.

Not sure if it matters or not, but I’m using Google apps for email and hosting is on namecheap.com.

What could be causing the problem and how do I fix it?

Thanks,