There are several different areas used to generate e-mail notifications. Knowledge Management uses such a mechanism for Subscriptions and Approval. I have written an article about how these notifications may be customized. This may be found at:
An SDN search on "Customizing Notifications" will turn up info on other mechanisms, such as this posting on User Management notifications:
How to Customize eMail Notification Textes
I hope you find this information useful. Let me know if you find any errors!
Regards,
Darin Krasle