Diagnose this by seperating your setup into steps.
1. Get your ISP to create and account and get it to work correctly in your favorite email program. Once you have it sending and receiving, you know it is setup correctly. No disable that setup in your email program and don't ever use it again.
2. Enter the information you used in your email program into WordPress.
3. Setup Cron as described in the help
4. Send ONLY plain text email to the account. Other emails will look funny.
Really that's all there is to it. From what you've said, I suspect you are stuck at step 1 which doesn't yet have anything todo with WordPress.