What happened to email settings?

I had my email settings working fine and now I'm running into errors that I never had before. I can't seem to even get my password for one of my stores sent to me again.
I get :

Email Error: Could not instantiate mail function. Please check Admin->Configuration->Email Options->Email Transport.

I want to use my MSN email (.msn) so what to I need to set them to?

Thanks!

I also can not access my admins for my other stores because it is showing that my password is incorrect and when I try to request it I get the same error ...

Email Error: Could not instantiate mail function. Please check Admin->Configuration->Email Options->Email Transport.

HELP!:cry:

It sounds as if your host has changed something in their email server settings. Try changing the Transport setting to one of the other options, like SMTP, and/or ask your host.

I got the exactly same problem like LilleyPadGifts. None of the settings in E-Mail Transport Method works.
The provider -Hostmonster- decided not to answer my questions.
Anybody was able to solve this problem?