I noticed the same issue is happening recently... but just when viewing in MS Outlook. I tried a few ways to fix it with no success. And I'm not sure if I did anything (I have been revising code) that may have caused it to start... since I very rarely use MS Outlook to read auto-generated site emails... except for testing... from my D7.0.9 site. Seems this issues has been happening for others, and for many years, so I'm hoping someone here solved it.
I did try removing "MIME-Version: 1.0\r\n" as suggested... but it didn't solve the problem... the rest of the header code is still displayed at the top of the email... and though it's not a 'deadly' issue, it does look bad.
While the specifications say \r\n, some email providers do not read it correctly. You can fix the issue by changing each instance of \r\n to \n in inc/utils.inc.php; I think there are three locat6ions.
\r is a carriage return and \n is a line feed.