Some additional features

Users can be notified when a new ad is posted in a certain category (based on taxonomy)

I will need this one too. I think I would like to extend that proposal to allow users to be able to specify matching triggers with notifications of what they might be after. But starting with a general notification is in the right direction.

Add more expiry notifications periodically, each notified by email

Now, the module's author and previous maintainer left a todo file with this statement: Notification emails: periodically send email to ad 'owner' (creator) with list of all current ads, by expiration date, with links to each ad (and link to delete, or renew.)

Perhaps that is just what you're after?

For the other item I would need a little more detail about proposed behaviour. Once an ad is tagged as a favourite then what?

Cheers,

Miles

Regarding point 1, this has been added to 6.x-3.x/7.x-3.x, with more notifications than previously (half-life, pre-expire, expire, pre-purge, purge), in the classified_notifications submodule. If you want even more, you could probably do it using Rules or Trigger and Actions and a small bit of custom code to defined.

Regarding point 2, you can already do this with modules Favorites, Flag, and a number of others.

Regarding point 3, you can use the notificationgs_tags submodule of Notifications to trigger notifications on new ads based on the Classified Ads categories.

So all your bases are already covered !