Hello.

For my upcoming social networking website, I am looking for suggestions on the best way to implement emailing. Here are some of my requirements and constraints:

Requirements:
- Should be able to send emails based on events (new registrations, change password, etc.), promotions (advertisements based on user consent), bulk mails (newsletters), reminders (profile updates), etc. I hope I got the point through.
- Should be able to process faults (incorrect email address, mail-box full, etc)
- User initiated invites (inviting friends to connect)

Constraints:
- As of now I am looking at Godaddy for hosting. Subsequently I shall move to, may be Amazon Cloud. Godaddy seems to be excruciatingly conservative (not bad always) when it comes to the ability to send email.
- My tests on Godaddy so far have been discouraging. There is limit to no. of emails I can send and sometimes if emails carries special characters it throws strange exceptions like there was a virus affected attachment (even though I hadn't attached a thing). The replies from Godaddy support have been equally funny.

My intent is not to portray Godaddy as wrong but I am looking for a work-around that frees me from said constraints. I am looking for a mechanism / service that is either free of very cost effective. I wonder how other sites address this.

Mine is a .Net / Windows based application.