No email notifications were received on backup failure. The following error was logged several times in the error log:
"An attempt was made to send an email when no email session has been established."
There is a new SQL Server Agent setting introduced in SQL Server 2005. By default SQL Server Agent will not make use of the Database Mail configured on the Instance. In the “Alert System” tab under SQL Server Agent properties, the Mail profile needs to be enabled.
The Mail Profile option must be enabled and the SQL Server Agent Service restarted.