Same problem over here. Version 1.5. I tested the mail command & it works fine on the server.
I dug out the functions.php file in the wp_includes directory which contains the wp_mail function. Flagged around the
return @mail($to, $subject, $message, $headers, $more);
line, which showed it is running that command.
Took the @
off the front of the function & it still returned no errors. However the function returns a blank value (ie. false) so the php mail command isn’t working.
So I replaced the command with mail('**my email address**', 'Hello', 'This is atest');
and it worked! So there seems to be a problem in the arguments being sent to the mail function.
Still looking…