HTML mail formatted as plain text

Hello, I am trying out this module for a new site and I have run into a problem with the emailed invitations: the HTML formatting is visible as plain text. Checking the headers reveals that the content type is indeed plain text. Also, I am using the SMTP module (5.x.1.x) for email, but the problem showed up before I installed this module. I am pasting headers below (lb is my local test server [XAMPP]. The actual hosting [lewblackburn.com] is done by 1&1.). Your help with resolving this issue is greatly appreciated.

X-Apparently-To: ccb_621@swbell.net via 68.142.199.38; Sun, 15 Jul 2007 23:14:08 -0700
X-Originating-IP: [74.208.4.195]
Return-Path:
Authentication-Results: mta121.sbc.mail.mud.yahoo.com from=lewblackburn.com; domainkeys=neutral (no sig)
Received: from 207.115.36.59 (EHLO nlpi030.prodigy.net) (207.115.36.59) by mta121.sbc.mail.mud.yahoo.com with SMTP; Sun, 15 Jul 2007 23:14:08 -0700
X-Originating-IP: [74.208.4.195]
Received: from mout.perfora.net (mout.perfora.net [74.208.4.195]) by nlpi030.prodigy.net (8.13.8 inb/8.13.8) with ESMTP id l6G6Dr5R012269 for ; Mon, 16 Jul 2007 01:13:53 -0500
Received: from [67.42.188.217] (helo=lb) by mrelay.perfora.net (node=mrus1) with ESMTP (Nemesis), id 0MKpCa-1IAJqP2Zn3-0001dU; Mon, 16 Jul 2007 02:14:07 -0400
Date: Mon, 16 Jul 2007 00:14:04 -0600
To: ccb_621@swbell.net
From: "lewblackburn.com" Add to Address BookAdd to Address Book Add Mobile Alert
Subject: RSVP: lewblackburn.com - Event Invitation [lewblackburn.com]
Message-ID: <8f8b820aaa23bf838af960bc730f3c30@lb>
X-Priority: 3
X-Mailer: PHPMailer [version 1.73]
MIME-Version: 1.0
Content-Type: text/plain; charset=UTF-8; format=flowed
Content-Transfer-Encoding: 8Bit
X-Mailer: Drupal
MIME-Version: 1.0
Content-Transfer-Encoding: 8bit
Content-Type: text/plain; charset="utf-8"
X-Provags-ID: V01U2FsdGVkX19Eb0R/Rc32vGbc2i3kJnAzXZ+3adIL00IbF/s 0/vIETu9lCcRQ+0ME3rzSekWkA1wL99GuQlZzGq8/iTe5FFclF 9BY2qMWdeAIiHoldUJyQSIBnOuaBnln
Content-Length: 353

Hello!

You have been invited to attend an event by admin at
lewblackburn.com.

You can view the event itself by following this link:
http://lb/?q=node/10

You can view the full invitation by following this link:
http://lb/?q=rsvp/email/fee4aca7a93d6ef1037731c46fa96634

Here is the invitation message:
Come see!