I was wondering how many people are using external email providers such as SendGrid or Mandrill? What made you decide to switch over from using the basic PHP mail method on your server? Also what is your hosting setup? Shared hosting, VPS, managed, unmanaged?
Another vote for Mandrill - been using it for over 2 years now. I use it on all of my sites, and I manage over a dozen Mandrill accounts on behalf of my clients as well.
I segment my outbound email by various criteria (site, source application, type of email, etc), which makes it easy to identify the source of deliverability issues and identify potential problems with your application.
Can also be especially useful for development servers where you want to capture outbound emails for diagnostic purposes, but not actually send them to a real user.
I dig this old thread because Mandrill changed its pricing structure. In the past, you could send 12.000 emils for free per month. Now if you want to open a new account, the maximum is 2000 emails for free. And only one time. If you used these 2000, you have to pay. Even if it is the next month.
You pay now $9.95 for 25k per month, $0.20/thousand next 1m emails per month. So with 250.000 emails per month I have to pa $50 per month. This is a lot for me. Sendgrid seems to be even more expensive...
I saw this comparison on the net (but is is a year old, so not with the new price structure):