As far as I can see in the session log the PHP script attempts to send the DATA segment without first providing any RCPTs, which is an error according to the SMTP protocol. Headers that might appear in the DATA segment won't have any relevance for SMTP delivery. It's up to the sending client to extract RCPTs and provide them in a proper way in the SMTP transaction.

/Rolf 

The following works fine: (PHP)

mail("newuser@localhost.com", "Subject", "Body", "From: Admin@localhost.com\n");

 When I move the 'to' email to the headers:

mail("", "Subject", "Body", "From: Admin@localhost.com\nTo: newuser@localhost.com\n");

 I get the error "503 No valid recipients specified"

 This normally works, is there a reason for this to be interpretted differently?

Rather depends on what the PHP script actually sends to Mercury. To find out, switch on session logging in MercuryS, and post the result here.

/Rolf 

08:25:52.390: Connection from 127.0.0.1, Mon Sep 15 08:25:52 2008<lf>
08:25:52.390: << 220 localhost ESMTP server ready.<cr><lf>
08:25:52.390: >> HELO irc-go<cr><lf>
08:25:52.390: << 250 localhost Hello, irc-go.<cr><lf>
08:25:52.390: >> MAIL FROM:<Admin@localhost.com><cr><lf>
08:25:52.390: << 250 Sender OK - send RCPTs.<cr><lf>
08:25:52.390: >> DATA<cr><lf>
08:25:52.390: << 503 No valid recipients specified.<cr><lf>
08:25:52.390: >> QUIT<cr><lf>
08:25:52.390: << 221 localhost Service closing channel.<cr><lf>
08:25:52.406: --- Connection closed normally at Mon Sep 15 08:25:52 2008. ---
08:25:52.406:

Another possibly related issue is when I send a multipart email, it seems to replace double new lines with a single new line.  This makes the message body not appear.

Your php script is not sending a rcpt to: line

I've used this same php script on many other servers (with same version of php). It only stopped working when I used it with mercury on my local computer. I can only guess that it is not reading headers properly since I do specify a "To" header which does get sent, it's just ignoring it.