I think it's definite that reply notification by email won't be implemented on this wordpress' forum software.
How about making the profile page, the one that you get when you click on "View your profile", to become some sort what Bloglines does?
On the profile page, we have a list of all threads that we have started or replied to. A special mark could be added if there's a new reply since our last visit. Thus, preventing us from clicking the threads' link one by one to check if there's a new reply.
Hmm, after thinking about, it is not as easy as it may sound? Or is it?
Well, if it fails we can still implement reply notification by email, can we not? :)