Here is the entry in the error log:
[29-Jul-2010 14:56:02] PHP Warning: mail() [<a href='function.mail'>function.mail</a>]: SMTP server response: 550 Unknown user in C:\folder\mail.mysite.com\program\steps\mail\func.inc on line 1437
This is line 1437 of func.inc:
$sent = mail($to, $subject, $msg_body, $header_str, "-f$from");