One of the great improvements in SQL Server 2005 is that it no longer requires an Exchange Server in order to send email. One of the most basic uses of email in SQL Server is to notify someone if a job fails – a backup, for example.
Here is a link to a most excellent article that explains exactly how to set up database mail in SQL Server 2005.
Once you’ve set up database mail, you need to go to SQL Server Agent properties, and on the Alert System tab, enable the mail profile you have set up. Then make sure you restart SQL Server agent. If you don’t restart SQL Server Agent, your test emails will work, but your job notifications will not.