The reason you got the email, is the sagepay code is further down the page than your email code.
I have no idea why the wizard would do that though...
On the page, after all those statements setting session variables to your post variables (around line 126)
you should have the code block for sagePay, then the code block for saving summary to dababase, then code block for saving details to detabase, then the send email block.
This way, if sage pay fails, it wont do all those other things.
I dont know why sagePay is failing. Is it forwarding you to your checkout_failure.php page?
I did notice you had an incorrect value in your notificationURL. You have:
$NotifyCheckout_Parameters["NotificationURL"] = "http://localhost/hairformen/httpdocs/checkout_notify.php";
and it should be the url to your live site domain, not localhost.