The alternative fix to Stan's is to change the function sendVmMail in components/com_virtuemart/helpers/shopfunctionsf.php as follows:
Change (twice)
$mailer->addReplyTo( $replyTo );
to
$mailer->addReplyTo( $replyTo[0], $replyTo[1] );
Change
$mailer->addReplyTo( $replyTo );
to
$mailer->addReplyTo( $replyTo[0], $replyTo[1] );
Change
$mailer->setSender( $sender );
to
$mailer->setSender( $sender[0], $sender[1] );
This preserves the names and the email addresses.
Best regards,
Reinhold