hmmm. when you say you are using windows XP do you mean that you are using your windows XP machine as the webserver? or is your windows XP machine the client?
if you are using windows XP (as your server) (or server and client) then I'd suggest the following...
firstly, make sure that the windows firewall has port 25 open to outgoing traffic, this is so the mail can get out.
assuming that doesn't fix the problem...
get rid of the third party mail servers that you have tried. click on start, goto the control pannel select add remove software.
then add remove windows components.
look at the details of the IIS server.
and select to install the SMTP server,
follow on screen instructions.
assuming that hasn't fixed it
Now look at your PHP.ini file, (C:\windows\php.ini)
make sure that this is under your mail function
; For Win32 only.
SMTP = localhost ; for Win32 only
smtp_port = 25
sendmail_from= email@example.com ; for Win32 only
windows XP has no pop or imap servers so it doesn't really matter about the account it's bouncing back to, these would have to be set up in your third part mail client...
the fact that you know that they are being bounced back make me believe that you do indeed have an SMTP server that is set up correctly, also that there are no problems with your recieving server...
so like I say... fistly make sure that you SMTP server is able to communicate with the outside world by opening up a port 25 excaption rule outbound on your filewall.