See the "How to enable the GD Library on your Testing Server" tutorial in the how to section of the contact form solution pack support page:
are the contact form files at the root of Dreamweaver Site you are using?
To be able to edit the server behaviors, the files will need to be extracted to the root of your site, if they are extracted to a subfolder of your site, it will not work.
Nice to know that code was hard wired to the root.
As far as the GD Library, my phpinfo says
"gd GD Support enabled
GD Version bundled (2.0.34 compatible)
FreeType Support enabled
FreeType Linkage with freetype
FreeType Version 2.1.9
T1Lib Support enabled
GIF Read Support enabled
GIF Create Support enabled
JPG Support enabled
PNG Support enabled
WBMP Support enabled
XBM Support enabled "
Is there a diagnostic routine I could run?