Im having the same problem and have tried the fixes mentioned in various threads with no success. Ive got 1.3.0 running through a different website and the e-mail is working okay there. Its not the best but its notifing me of new accounts, orders etc... Some of the other e-mail features in 1.3.0 still arent working but Im not as concerned about that as I am with the problems in the upgrade to 1.3.5. Nothing is coming through there, no notifications of account, orders, etc...