- Why can't I receive an email from "email a friend"?

The first thing to check is that the SMTP server is set up correctly for PHP on your host. If that's ok then the problem may be that you have to set an email address in your main admin page is a valid email on the domain. For example if your domain is:
www.yourdomain.com
then an email like
info@yourdomain.com
...is ok. But something like
info@anotherdomain.com
...will not be.

General problems

The URL for the product link from the email a friend option is not correct - what's up?

Check that the base URL in your main admin page is correct - this will probably be something like http://www.mysite.com

Why don't I get email notification of sales through PayPal?

The PayPal Instant Payment Notification has probably not been set up. There are details about it here