Info on this seems a bit thin, and diagnostics are difficult.  This is one of the key exciting features for us, to cut down the amount of spam emails OnTime produces (create a defect, add three attachments, add some notes, and you now have five emails in your mailbox if you had notifications set to "create/change defect")

1. I don't see "Workflow Step" as a trigger field.  Huh?  Isn't that about the most important field?
2. In the User Guide under "Working wtih Alerts", it says "To configure alerts see Configuring Email notifications in the Administrator's Guide."  Unfortunately, that section of the admin guide has nothing at all about alerts.  If I had to guess, I'd suggest you meant "Setting up OnTime 2007 Email Service"
   

 Right now, alerts aren't working at all, but we'll call in for that.