Is there a great article or tutorial lately about email()? Just after your post there was another like this one. You will have to set the php.ini which might be in you c:\Windows\system or system 32 folder on your machine if I remember correctly. The lines you need to edit are shown below;
; For Win32 only.
SMTP = mail.somehost.com //whatever your email host is for SMTP
smtp_port = 25
; For Win32 only.
sendmail_from = youraddy@somehost.net //whatever your email is and remove the semicolon.
Most likely your php.ini has the default setting of localhost and the senmail_from = is a nonsense example with a semicolon. Change the SMTP = to SMTP = (whatever your outgoing mailserver is as in your e-mail client such as Outlook or Outlook Express). Then remove the semicolon from in front of sendmail_from = and enter your own e-mail address. Restart your computer after you have made changes to restart the server so it can see the new changes. Then do a phpinfo() and in the second table of phpinfo you should see under SMTP= and sendmail_from the new changes then give it a test and you should be good to go.