GREAT news for me and my client: CF7 is working finally.
I think the probs we were having were a combo of not getting the CF7 settings quite exactly right (see below) and also DreamHost having issues with their mail server this week.
Here's a pretty good tutorial explaining how to set up CF7 so that a DreamHost server will not interfere with mail delivery.
http://savorywatt.com/2012/10/10/fix-contact-form-7-not-working-with-dreamhost/