Send mail to setting

Hi I am using the contact widget in a sub-folder of my domain.
I have added the admin email in the settings but the form does not work.
I am guessing that 'admin email' is the email address the contact form will mail to. Is that correct? If not, where do I add this email address?

Is there some setting i need to change?
If I install wordpress to the root directory, will it work?