phpmailer error "Could not instantiate mail function"

I'm using the mail() basic example modified slightly for my user id and I'm getting the error "Mailer Error: Could not instantiate mail function"

if I use the mail function -

mail($to, $subject, $message, $headers);

it works fine, though I'm having trouble sending html, which is why I'm trying PHPMailer.

this is the code:

$mail             = new PHPMailer(); // defaults to using php "mail()"
$body             = file_get_contents('contents.html');
$body             = eregi_replace("[\]",'',$body);
    print ($body ); // to verify that I got the html
$mail->AddReplyTo("reply@domain.com","my name");
$mail->SetFrom('from@domain.com', 'my name');
$address = "to@domain.com";
$mail->AddAddress($address, "her name");
$mail->Subject    = "PHPMailer Test Subject via mail(), basic";
$mail->AltBody    = "To view the message, please use an HTML compatible email viewer!";
$mail->MsgHTML($body);
$mail->AddAttachment("images/phpmailer.gif");      // attachment
$mail->AddAttachment("images/phpmailer_mini.gif"); // attachment

if(!$mail->Send()) {
 echo "Mailer Error: " . $mail->ErrorInfo;
} else {
 echo "Message sent!";
}

?>

From stackoverflow

• You need to make sure that your from address is a valid email account setup on that server.