If it works for some and not others, most likely you have StopForumSpam enabled in registration settings. I disabled this because it was blocking users from signing up that weren't even spammers. You may want to at the very least set the flags before "manual approval" lower.
Also I use
admin@website.com for mine and don't use an email server. I'm not currently using email registrations but when I was this worked without any problems. Also make sure you have "sendmail" installed. If you don't emails won't be sent. If your not sure ask your host.