In the video where you select your server model it says this about the code you need:
choose your server model to download a zip file of code, open the file in a text editor
You can have different content in the html and the plain text, you should edit the html with the DW icon and the text with the pencil icon.
You will need to specify the PEAR root directory like you have mentioned. To help determine if the Universal Email server behavior was triggered you can specify a page for the redirect, this way you will go to that page when the server behavior occurs.
If you are having difficulty getting the email to send you should contact the admin for your SMTP server and ask if there are any entries in the logs for your attempted mail send.