You can also have a look at this TN:

Email Notifications Settings and Their Behaviors
http://www.symantec.com/docs/TECH64984 

Please ALWAYS mention or select OS on NBU master server when starting a new discussion.

For email notification to work, you need to ensure that a mail client is installed and working at OS level.
For Windows, you can install and configure blat.
For Unix/Linux, ensure that root can send email using sendmail (mailx).