First of all, what is the output of:
svstat /service/*
ps -ef | grep qmail
Why are you upgrading to netqmail-1.04 (which is simply qmail-1.03 with some basic patches). What problem are you trying to solve?
The error you received is because qmail-send was still running and it was attempting to deliver a message locally. Did you check the qmail logs to verify that qmail had actuallly stopped?
