by Ian McNaught.
I've been running Moodle on AWS for nearly 2 years, and email was the biggest headache until I discovered Critsend email relay service. It's not free, but incredibly cheap (and you get 50,000 mails for free to start you off). It will take you about 5 minutes to get Moodle on AWS setup to use critsend, and you get useful reports and statistics too (e.g. how many users open the emails sent).
We've used them for 2 years now, sent about 500,000 emails and not had any problems.
I wanted to use SES to keep it all in AWS, but it won't send on behalf of others, only on authorised email addresses - which isn't very suitable for Moodle.