Just solved this problem and thought I'd post the solution.

I've just implemented FormMail on a domain with a remote mail server. Everything tested fine until I tried to add the clients email address as a recipient.

Emails failed with no detail in the error notification. Eventually tried testmail.php, which displayed an SMTP error. Problem related to the local server trying to find the mailbox locally and not on the appropriate mail server as per the DNS setup.

Problem was solved by de-activation the mail service on the local host - unfortunately the default was ACTIVE (Plesk) even though it was never the actual mail server for the domain.

Hope this saves someone else the time I just burned