So, for the past 7-8 months, I've mucked around with email marketing in the e cigs niche. What I've found for my case:
1 - I almost broke even on the cost for building a list of a few hundred in this timeframe for this niche.
2 - The majority of my click thrus from the mailing list were from e cig company representatives or other marketers.
3 - These same company reps would either 1 - Hit me up for various mods, changes, etc to my site, or 2 - Search for marketing ideas the other brands I was selling were using, or 3 - Use the updates as a means to check for potentially negative information on their brands in my content.
4 - Normal consumers who subscribed normally did so after already purchasing an e cig product where I already got credit for repeat business from the consumer.
5 - The sales I did make that I attribute to the newsletter came from customers who were switching brands. I do not know if they would have gone directly to the main site to find the same info and purchase or not.
6 - I started a Facebook Fan Page a bit ago that now has a few hundred "Fans" that appears to achieve similar conversion rates at no cost to me.
My conclusions: At this point it appears as though the FaceBook Fan Page has greater potential ROI compared to email marketing for this niche. I'm sure there's a way to turn the list into additional sales in somewhat related niches, but just need to figure it out. The list does not appear to be profitable in shopping additional e cig related products.