dovecot - Jan 2008 - How to use deliver to deliver to virtual users

Hi,

Ok, here's my setup, each virtual user has a home directory as follows:

/virtusers/<v_userid>

and per the INBOX directive in the dovecot.conf file I also have a file as 
follows:

/var/mail/<v_userid>

Now, I've followed the directions as outlined here: 
http://wiki.dovecot.org/LDA/Sendmail

But every time I send mail to one of my virtual users, I get this message

The original message was received at Sat, 5 Jan 2008 14:22:51 -0700 (MST)
from wa-out-1112.google.com [209.85.146.183]

   ----- The following addresses had permanent fatal errors -----
/var/mail/jdunkin
    (reason: Can't create output)
    (expanded from: <jdunkin at whitneybaptist.org>)

   ----- Transcript of session follows -----
550 5.0.0 /var/mail/jdunkin... Can't create output

What could I be missing?

Andy