Email app stopped sending

Hey,

I'm having issues with one of my clients sites, the email app has stopped working (was working fine a few weeks ago I checked when updating). It has started displaying the "Could not instantiate mail function" when I test it with the following error message...

Array ( [type] => 2 [message] => mail(): Failed to connect to mailserver at "localhost" port 25, verify your "SMTP" and "smtp_port" setting in php.ini or use ini_set() [file] => \WEB-123WIN\WINPACKAGE22\sweetthingscakes.co.uk\www.sweetthingscakes.co.uk\web\content\perch\core\lib\PHPMailer.class.php [line] => 682 )

I'll hold my hands up and say I'm not 100% sure what I'm looking for... is "localhost" an issue, should I set to the hosts settings?

I have been on to the hosting company support (all they want to do is roll it back to php 5.2 grrrrr!!) they have informed me that php mail is enabled. But not really getting anywhere with them (the client choose to host the site themselves on some budget hosting).

Any help would be very much appreciated

Thanks

Jon