[eluser]silverback[/eluser]
I've narrowed down the problem to this line in Email.php:
if ( ! mail($this->_recipients, $this->_subject, $this->_finalbody, $this->_header_str, "-f ".$this->clean_email($this->_headers['From'])))
Namely the "-f ".$this->clean_email($this->_headers['From']) seems to break it.