"Send Direct Email" does not work

A client called me a few days ago and said that he couldn't 'Send Direct Emails'. After he'd select the template to send, it would simply do nothing, the History wouldn't show the send email nor would the recipient recieve any emails.

Naturally, the first place I looked was the Microsoft CRM Bulk Email service. I found that it was set to logon as the Network Service account. I changed this to Local System account (this is after I had tested to ensure that emailing was working from all other avenues in Microsoft CRM) and voila it started working.