if you browse to a PHP page and it asks you to save it, you dont have PHp installed. If you can see the page fine to register, you must have PHP installed.
Whether you have a dedicated server or not, (sounds more like you have a VPS) you should have no issues adding the lines above to see what they output so you know what is failing and what the error is as you are putting the mail failure response into a variable.
From what I remember, it is usually a problem with headers with Godaddy.
try changing
Code:
$headers = 'MIME-Version: 1.0' . "\r\n";
$headers .= 'Content-type: text/html; charset=iso-8859-1' . "\r\n";
$headers .= 'From: [email protected]' . "\r\n";
to
Code:
$headers = 'MIME-Version: 1.0' . "\r\n";
$headers .= 'Content-type: text/html; charset=iso-8859-1' . "\r\n";
$headers .= 'From: [email protected] <[email protected]>' . "\r\n";
as the header isnt fully valid.