I just would like to share with you my solution to the conflict between Contact Form 7 and WP-Mail-SMTP. I am running CF7 and WP-SMPT on WP 2.9.2, so, many of you might have been able to sort this problem by upgrading to later versions of both pluggins.
For those of you who, like me, cannot upgrade. My solution has been this.
1. Change name <email> in contact form with just email. For example, if contact form 7 sends to Paul White <email@example.com>, change it to firstname.lastname@example.org.
2. Go to WP-SMTP settings page and copy your settings.
3. Deactivate WP-SMTP.
4. Go to this link: http://wordpress.stackexchange.com/questions/75956/whats-the-easiest-way-to-setup-smtp-settings-programmatically and copy the programmatical solution in your functions.php.
5. As you can see, the parameters in the programmatical solution are the same as the ones in the settings page of WP-SMTP.
6. Change the parameters in the programmatical solution to match the settings you copied from WP-SMTP settings page.
7. Save functions.php.
8. Run tests.
Unless there are other conflicts in your WP, you should now be able to send email through the SMTP server even with CF7 without any errors.
I hope this helps.