Email and Global Alerts v808e2

I have enabled global alert 1120 for my live company. This should,
as I understand it, send email confirmations to customers when their
order ships, as long as the smtp information is set up in the
copmpany config file.

Two-part question...I can not seem to get these emails going,
although order confirmations from customer connect do, so I am
fairly certain my smtp is configured correctly.
I have the same config set up for the live and test accounts. Both
use the same server folder, and therefore the same mfgwork folder
with the same smtp log file. Could this be causing a problem?

Does anyone know the specific process for shipping confirmations?
I have email addresses set up for the company, the contact at the
company, and the ship to location, each different addresses, so I
would think to get something somewhere. The smtp log shows a
processing and complete confirmation every minute, showing that the
process is running, but never do I get any details in the log
specific to one email.

The contact in the company is set as the shipping contact. I know
this adds to packing list, but can not figure out about emails.

The best I can see is that if no ship to is specified, it should
pull from the company record. If there is a company record, and a
contact record, but no ship to, should it pull from the contact? And
if there is a ship to, but no email set up for the ship to record,
this means it is not expected to go? And finally, in such case where
there is a ship to, I need an email address there in order to get it
to go out? Still can not make it work. Anyone know what I am missing?