We spoke on the phone earlier today and went through some various test scenarios with a testing script and the PowerStore. It seems that there is an issue with the php server in regards to the PEAR mail include file. For some reason the open base dir restriction error is coming up even though it seems that you have turned this off.
When we tried with the other server we did not get any sort of response, and when we tried to check the logs we could not find a association with the domain for the unauthenticated mail server.
I will leave this thread here for any others to reply to, in general having access to a mailserver that does not require authentication does not seem to be a common issue. I have personally implemented UE code on sever hosted sites and I have never had a configuration issue with it.