Email Newsletter Subscription via GFC & GAE

There is one major limitation when sending out legit mass emails via SMTP ("compose") - a daily cap on the number of emails allowed to be sent from a mailbox. This applies to most e-mail service providers.
Google Apps Standard, the free edition, allows a maximum of 500 outgoing mails per day for each user id.
Even the Primier edition which costs $50 per user a year limits outgoing mails at 2000 per day for every email id.

There are two cost-effective ways to send out newsletter emails via Google's services - Google Friend Connect (GFC) and Google App Engine (GAE).

Google Friend Connect

A lot of people are not unaware of the fact that you can actually send out newsletters for free to your subscribers via Google Friend Connect (GFC).
The catch is that the users have to be susbcribed exclusively via Google's Subscribe button without which there is no way for the newsletter to reach the user.
This is really a tough catch as you got to have it's subscribe button right from launch date.
Its a major turnoff, especially when a website collects registration infomation via a form and sends the data to a database, after which emails are sent separately.
Most email marketing systems like aweber, mailchimp, emailbrain, constantcontact, madmimi etc have the option to add subscribers manually externally.
And with GFC, you would not be able to retrieve the subscribed users' email ids via the control panel - export gives only names, ids, open id urls and thumbnail images.
So, at a later point in time, if you decide to switch to another email marketing system, you would need to send one last email asking them to re-subscribe to a new system.
Another bad news is that the subscriber's email address must be an open id ! (google a/c, yahoo a/c, twitter, AIM, netlog or any other openid)
Looks like all bad news, but if you think from the users' perspective, this is a good deal.
Its secure since there is no way for emails to be leaked accidentally.
Its safe because there is no room for errors in accidentally sending out mails to users who have unsubscribed.
Regarding the sender / from email address - It would be the same as the google account username. So if you don't want it sent from myusername@gmail.com, then create a google account under your app id. (This dual account chaos would be resolved soon : Google Apps Accounts Will Also Be Personal Google Accounts)
GFC is straigtforward, only bit of major work required is getting the audience to hit the google subscribe button.

Google App Engine

If you are not convinced with GFC then check out GAE - Google App Engine.
It has a daily free quota of sending emails to 2000 recipients. Link
After that, its billed at $0.0001 per recipient - thats just $1 for sending to an additional 10,000 recipients which can execute in about 2 minutes ! Link
But you've got to code to take advantage of GAE and your website should most probably be powered by GAE as well.

Google Groups

Then there is always google's mailing list at google groups.

But this cannot really be act a newsletter system.

If you want to submit ideas / suggestions to the Google team for its products, you can submit or vote at Google Product Ideas which is open to the public.