@mikepratt
I was originally going to make use of one of the forum subscription plugins but our students have requested to be “spammed to death” with updates regarding their collaborative group work – much like facebook. Of course, now that they have got their wish they realise that receiving a huge raft of emails regarding your work each day isn’t quite as fun as hearing about what your friends did on facebook… 
I’ve posted an update on where I’m at with the plugin and what I’m planning to implement before release this weekend. The link is below but I’ll also cut+paste the content as it’s probably going to get more people reading it if it’s on here rather than my small dev site.
Update:
Current bugs fixed. Will be adding the following requested features in the next couple of days with planned release on fri/sat/sun:
1) User’s have to be registered X amount of time for their activites to email people. Warning about this in the notifications screen. Amount of time defaults to 1 week but controllable in wp-admin backend.
2) Mention of the need to check these notification settings in the sidewide notifications area. Perhaps a list of links to the group notification settings for each group the user is a member of too.
3) Default behaviour for the plugin will be for activity updates to be off or at least infrequent. This default behaviour controllable by wp-admin backend.
4) Possibly change all notification settings to be time based as per the current group wiki edit ones
5) Enable group admins + mods to send out a group update that overrides group user settings in regards to not receiving updates. This will be done by ticking a box on the update screen, an extra “what’s new†bit in the group notifications area or a screen in the group admin area.
6) Finish the implementation to allow plugin authors to add their own action type handling
The aims of these changes are:
1) Keep the interface as simple as possible for all the site users
2) Have default behaviour that isn’t too spammy
Possible future updates:
Ability for users to have update ‘digests’ received at a specified time daily. Allowing users to choose the time they receive the update should help spread server load.
http://namoo.co.uk/blog/2010/02/01/group-activity-stream-email-notifications/#comment-11