> mydomain.biz to IP address
>
www.mydomain.biz to IP address
>
> mail.mydomain.biz handles mail for mydomain.biz
Fine, but what's "mail.mydomain.biz"???
You know it, we know it, but the DNS system doesn't! A mailserver tries to send a message to your domain, performs the DNS query for a mailserver (MX) record for the domain - gets 'mail.mydomain.biz'. Then it tries to get the IP address of that host and gets an error! No such host exists...
Add that hostname 'mail' to the same IP address in ZoneEdit, like you did with 'www' and You'll be fine

Regards
Stan