You say that the pages are not redirecting properly, please explain where they are going to now and where you would like them to go. In general the forms should submit to the same pages they are on, then the server behavior should run to either login the user, register a new user, update the profile, or log the user out. Once the server behavior has ran it should then redirect to whatever is specified as the redirect for that server behavior. Please post back with the details about how it is behaving for you now and how you would like it to work.
As for the email testing on localhost you will need an SMTP server running in order to send mails. The email addresses that you are using do not have any relationship to the mail server. If you need to authenticate then you will need to make use of the PEAR mail object that allows for authentication based on username and password.