BuddyPress.org

By default, WordPress sends system email using sendmail.

If you receive admin emails (new user joining, password changes, etc.), your email server is working, and it should send out notification emails to members without problem.

Members configure their settings: My Account … Settings … Notifications

If you want to use a different email server, e.g. smtp, this may help: http://maisonbisson.com/blog/post/12939/using-wordpress-with-external-smtp-server/

If you want to send specific emails to members, you could look at something like the Welcome Pack plugin