You should really stop using mailto to send forms in the first place. The problem with mailto is that it depends on a users mail client to send the thing, not every user will use a mail client, for instance, people who use yahoo, msn, hotmail, aol, or any other number of webmail services will not be able to use your form properly unless they have their browser setup to use hosts servers. You should try to send the mail from your hosts smtp server if they allow you to use it, it would be in the hosts faq if you can. You will need to use a server side script to connect to the smtp server though. Who is your host, I might be able to help you figure out what your options are.
well this is weird. The mails should go into that folder before they are sent off, do you have an smtp server running or is mail queuing inabled or what? Is this the same server that is hosting the site? If not then try putting it on the final destination server and test it from that.