I was desperately browsing the internet for a mail feature for moodle, and I have found one. I have installed it and it works fine. I did not make this module I just stumbled across it on the WWW, and I am not sure if it has already been discussed on the Moodle site yet. I know I have searched the forums and not found any discussion about this mail module.
The only problem I have discovered with this module is that the select recipients are in Spanish, while everything else is good.
This module is an internal module and it does not send mail to the students outside email addresses, it gives on in class Mailbox where you can notify the student of new messages.
Hope this helps,