Using Contact form 7 Version 3.2 fine on my personal blog web site and then upgraded to WordPress 3.4. The contact form stopped working with the usual red administration error message.

I found that I had to add WP-Mail-SMTP (latest version Version 0.9.1 ) plugin and set SMTP to defaults of localhost and then it worked again.

Rather odd. Take care if you are upgrading to WP 3.4 to check your contact forms still work.