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The email isn't being sent from the address I define

Are you sure that that address exists on your host? If you use MX records, you have to set up the email address on your host as well for it to work correctly.

My variables aren't being passed to the email

Make sure they are in the format %variable% with no spaces between the % and the variable.

I'm not getting any emails sent, to me or the user!

The best thing to do is search in the WordPress Forum, since there are countless different reasons and solutions, but the problem is likely with your server setup.

I get the following error on activation "Parse error: syntax error, unexpected T_STRING, expecting T_OLD_FUNCTION or T_FUNCTION or T_VAR or '}' in /wp-content/plugins/newuseremailsetup.php on line 44"

You are using PHP 4 and the plugin uses functions introduced in PHP 5. Please either upgrade to PHP 5, or download the alternative PHP 4 Branch of this plugin from here.

Can you implement function X?

That depends on what that function is, and whether I'm free to do it/able to do it. It will also depend on whether the custom version will be paid work. Email me at alex at epicalex dot com for more on this.