I've set up zenphoto on my website imgspace.hyperfixer.com, when i sign up as new user and get my verification email, the email appears all jumbled up and unrecognizable. http://i48.tinypic.com/2i3kfm.png

What could be the problem?

You are looking at an ecoded mail. Probably your mail handler does not know how to deal with these.

Is there a way to unencode it? Since it appears gmail can not decipher it properly.

Sure, use a fully featured e-mail client. Zenphoto is not encoding it--that is done by the mailing system and is done becauce characters outside of the ASCI-7 subset are not generally transportable by the email protocols.

It is also possible that there is some problem in the transportation that is corrupting the message.

It's all fixed now, i switched from the Zenphoto Sendmail plugin to the Phpmailer plugin then entered info from my email host provider.