Sql-server – Send email from SQL Server

For 2005 and 2008 you need to configure Database Mail then enable the Agent to use it (SQL Server Agent --> Properties --> Alert System). If problem persists, you can query the system tables related to Database Mail (check BOL for names of tables) for possible more information. If problems still persists you may need to work with your Exchange admin.

For 2000 you need Outlook installed.

You aren't the one getting the error, the activated stored procedure is. That procedure is running under a different account than yours.

By default that procedure will run as what ever account is setup as the dbo of the msdb database, unless someone changed it of course. Best guess is that the account which is dbo of the msdb database isn't a member of the sysadmin fixed server role, or the activation principal of that queue has been changed (querying sys.service_queues will tell you this).