I am testing 1.2 with Joomla 1.5. I am using hostmonster. When registering on the site, sending a mass mail etc. The email i receive is fine. It is from my e-mail. When a user uploads a picture, and I approve, the approval e-mail comes from "username@host255.hostmonster.com"
I tried and tried to figure out how to fix this to no avail. Host monster support has this for an answer:

This is because our servers require you (or your script) to use a properly formatted, valid From: header in your email. If the From: header is not formatted correctly, empty or invalid our system will change the from address to be <username>@<host#>.hostmonster.com. To stop this, you must change the script you are using to correctly use a valid From header.

Examples of headers that should work would be:
From: user@domain.com
From: <user@domain.com>
From: "name" <user@domain.com>

Examples of headers that will NOT work:
From: "user@domain.com"
From: user @ domain.com

Alternative for PHP Users:
- You can also modify which account should be used when sending out using the mail() function. Inside the local php.ini file, you will find a line of code that looks something like this (around line 601):

sendmail_from = mail@yourdomain.com

Be sure to uncomment this by deleting the ';' before the directive. Also, the account you use must be a valid created account.

I have tried using the php.ini file in the root and in the comprofiler folder and it hasn't worked. Can someone tell me where it should go or how to resolve this?? Thanks!

this solution worked:

riteshsapra.net/wp/2008/06/05/wordpress-sender-email-incorrect-hostmonster/