To save someone a couple of hours of trial, error and log watching, this one is easy to fix. I think it may only relate to 1.6 RC4 (we can't easily upgrade at the mo).
In automail.php, where you put the URL and key in, ensure that you call the md5() function on the key, e.g.:
$config=array('url'=>'http://myurl.com/support/api/pipe.php',
'key'=>md5('my key'));
Better still, run md5('my key') and copy/paste the output to avoid having to call md5() each time.
