I have an Exchange 2003 server set up with the following settings in inc_mail.asp (the strings in angle braces <> are placeholders for the actual values):
E-mail verification e-mails are correctly being sent when users change their e-mail addresses, but no notification e-mails are sent when new postings are being added to the forums.
The "highest level of subscription" is set to the "subscribe to the whole board" and all users are subscribed to the "whole board" but the "All Subscriptions" admin menu shows "Subsciption level set to Category".
From your post it looks like email is working but subscriptions are not fully setup. I take from your post that you have enabled subscriptions in the admin area. Have you also edited each category & forum on the main page of your forum? You need to set the highest level of subscription there also.
e.g. edit a category and set the highest level to forum edit a forum within that category and set the highest level to topic
BTW, where are these guidelines documented? For example, if the highest level subscription is set to forum what do the other levels have to be set to? Ditto for topic, category, etc.