Server email is enabled through the SQL Server OLE Automation feature, which uses Collaborative Data Objects to send email.
Note: The Active Directory Account that SQL Server runs under must have read, write access to the network location designated for temporary files that are to be attached to e-mails. The path to this location is set in the “Tools>Options” form, System Options, “Temporary folder for use with server based e-mail”.
OLE Automation is switched off by default in SQL Server 2005 and 2008, so must be enabled.