INSTALL

Requires messaging module, which in turn requires phpmailer for html mailouts: http://sourceforge.net/project/showfiles.php?group_id=26031.  Choose either php4 or php5 whichever is appropriate. 

ADMINISTER

Notifications event selects event content types from past and future to display in email format.  The time intervals are set at admin/notifications/settings/events.
notifications_event does not accumulate events in the notifications_queue, instead it runs a batch job when triggered (either manually or via cron), fills the queue and then processes it immediately afterwards.  This ensures that the mails are delivered smoothly and uses functionality already present in Notifications.
The layout of the mail is determined by functions theme_notifications_event_digest_body and theme_notifications_event_digest_htmlbody since notifications_event only uses the digest option.  You can modify this in your theme template.php, but bear in mind that those modifications will not apply during a cron run.