Newsletter Will Not Send

I have just created a website for a customer with zencart, they were very intrigued with the newsletter feature. They have a list of about 800 customers that they were emailing through a hosted email marketing company. And want to do all newsletters through zencart. I installed the add customer in admin add on. It added all the customer with no problems. When we sent the first newsletter it sent a number of them but then came up with the error

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

It worked for quite a few of them so it is working, and we ran a test one before we added the customer lists. The only thing I can think is maybe they limit how many you send? How can we fix what ever is causeing this error?

Its currently set up as sending emails through PHP and hosted with Godaddy, and it works for a number of customers so I know its not godaddy

There might be some ideas here:

http://www.zen-cart.com/forum/showthread.php?t=88586

I'd be very surprised if GoDaddy doesn't throttle outgoing mail. The other sites might not be sending as many, or may have dedicated servers. I'd check with the host first.

Please remember that while the newsletter function is there it is NOT the optimal way to handle these things,
1 its slower than ( insert quote here )
2 it does not allow for throttling, this is necessary since most hosts will have a max number of emails allowed in an hr....