I have a client who has the Subscriber2 plugin that automatically notifies subscribers when posts are made, as well as having the ability to email out to all the subscribers.  One day it was working fine, then she all of a sudden receives the message, “Message failed! Check your settings and check with your hosting provider Could not instantiate mail function.” when she tries to email out a password protected posting.  In addition, after she created a new post, an email was not sent to her subsribers.

After thinking it was a plugin issue or maybe a WordPress issue, I finally got help from a colleague (Jeff Scotti of Scotti Designs) who recommended I contact the hosting company because one of the reasons it might not be working is because: Restrictions on the number of messages sent. In order to combat spam many hosts are now implementing time based limitations. This means you are only allowed to send a certain number of messages per unit time, 500 per hour for example. 

Sure enough, my hosting plan only allowed 150 message per hour.  The rep increased the messages to 2000 and it now works!  Thanks Jeff!