If you enable this module, the "From" address on contact emails, both site emails via the contact form and user-to-user emails via the member contact form, will be "From" the email address configured in site_mail (admin/config/system/site-information in d7). The reply-to header will be set to the address that Drupal would have used as the From address.
Note that Drupal 8 has this feature in core, so this module is not needed in D8.
This avoids many spam-classification issues. Many, many mail handlers will classify as spam a mail that comes from an unauthorized location, as this is spoofing. What Drupal does by default is spoofing...
Dreamhost actually *prevents* the sending of Drupal emails in many cases. This module should resolve that problem, but it's a problem elsewhere almost everywhere the Drupal contact form is used.
If you don't mind using a 3rd party service and have a nontrivial site, you'll probably enjoy the mandrill module and service. If you're on Dreamhost shared hosting, though, it probably means you have a trivial site to maintain and Mandrill would be overkill and additional complexity.
DDEV is the official local development tool of Drupal. And like Drupal, DDEV depends on the support of the open source community.
