Actually, I wonder if it is because I set a minimum bid price.

The module sends me "webmaster" an error email with an attachment message saying sorry you have been outbid.

The message comes in an error email too:
The original message was received at Sun, 5 Oct 2008 18:05:42 -0700
from clubina@localhost

----- The following addresses had permanent fatal errors -----
<>
(reason: 550 5.1.1 User unknown)

----- Transcript of session follows -----
550 5.1.1 <>... User unknown

However the attachment is fine with no apparent errors. It is a standard email saying I have been outbid.

Ofcourse, I know i wasnt really outbid, I just set the starting price in the product screen ant that starting price was outbid by the first coustomer.