email functions are broken

My website: http://www.ponderplace.com
Wordpress Version: 2.3.1
My theme: Mistylook 3.5

I am using the WP-ContactForm: Akismet Edition plugin from http://www.bloggingexpertise.com/plugins/wp-contactform-akismet/

And when i have the email (to send the contact form messages to) set to stephen -at- ponderplace -dot- com, i receive the following error.

Warning: mail() [function.mail]: SMTP server response: 550 Requested action not taken: mailbox unavailable or not local in C:\Inetpub\vhosts\ponderplace.com\httpdocs\wp-content\plugins\wp-contactform-akismet\wp-contactform.php on line 201

However, when I set the email address (in the plugin options) to lilnigsta -at- gmail -dot- com – the contact form submission works just fine.

I’m confused.

My only working theory as of now is that when i upgraded to WordPress 2.3 (from 2.1.3 i think) i also switched platforms from a godaddy.com basic linux hosting to a virtual dedicated box running windows 2003. The only things I had to do to the database was a find and replace to adjust the location of the wordpress and everything seems to have moved over (a few minor issues such as picture thumbnails etc are still present)