Is spampal installed on your PC, or is it an Internet-based service? 127.0.0.1 is a special IP address, which tells your computer to talk to itself.
If it's installed on your PC, it sounds like there's something wrong with it. If you haven't had to install some software on your PC, the server address is wrong.
EDIT: Scratch that. A quick look at
www.spampal.com shows it's installed on the PC. Make sure it's running:
http://www.spampal.org/faqengine/faq...pampal&lang=en