I think the problem you encountered is ALMOST EXACTLY the same as I experienced. This is the solution I applied to get the code working - please bear in mind, I was using two separate hosts, however you can use my solution as a guide.

First of all, ensure your subscribe table exists on the same installation as your forum.

Find function "stt_notify", I've modified it to be like

function stt_notify($post_id = 0) {
//remove_action('bb_new_post', 'stt_notify'); // bbpress bug, fires multiple times?
global $bbdb, $topic_id, $bb_current_user, $subscribe_to_topic; $time=time()-60;
$topic=get_topic($topic_id); if (empty($post_id) || empty($bb_current_user->ID) || ($topic->topic_posts<2)) {return;}
$query = "SELECT username, useremail as user_email FROM subscribe_to_topic WHERE topic = ".$topic_id." AND type = 2 AND time < ".$time." AND post > last";

$emails=$bbdb->get_results($query); if (empty($emails)) {return;}

$topic_link=get_post_link($post_id);
$unsubscribe=add_query_arg( 'unsubscribe', $topic_id, $topic_link);
$from=bb_get_option('from_email'); if (empty($from)) {$from=bb_get_option('admin_email');}
$from_email='From: ' .$from;
$user_name=get_user_name($bb_current_user->ID);
$subject="[".bb_get_option('name') . ']' ." ". __('new post notification');
$message = __("There is a new post on [%1\$s] \n\nReply by: %2\$s \n%3\$s \n\n\nUnsubscribe: \n%4\$s \n");

foreach ($emails as $email){
mail($email->user_email, $subject, sprintf($message, $topic->topic_title, $user_name, $topic_link, $unsubscribe), $from_email);

$ids[$email->user_id]=$email->user_id;
// print "$email->user_email
\n";
}
if (!empty($ids)) {
$ids=implode(',',$ids); $time=time();
$bbdb->query("UPDATE ".$subscribe_to_topic['db']." SET last=$post_id,time=$time WHERE topic=$topic_id AND user IN ($ids)");
}
}

find function "stt_change_level", I've modified it so it like:

function stt_change_level($user_id=0,$topic_id=0,$level=0, $user_info = "") {
global $bbdb, $subscribe_to_topic, $bb_current_user;
// print("<hr>

");
    // print_r($user_info);
    // print("

if you're still battling, email me: trippygrape [AT] gmail dot com and i'll send you my modified code which you can work on as a guide

cheers,
John

Also is this installation running off the same wordpress or are you allowing access from a user base on another host? I ran into a couple of walls with this plugin as bbpress lives on a subdomain on it's own and shares the user tables from our main site, but with some modifications works like a dream.

CREATE TABLE IF NOT EXISTS subscribe_to_topic (
user int(10) UNSIGNED NOT NULL default '0',
topic int(10) UNSIGNED NOT NULL default '0',
post int(10) UNSIGNED NOT NULL default '0',
last int(10) UNSIGNED NOT NULL default '0',
time int(10) UNSIGNED NOT NULL default '0',
type tinyint UNSIGNED NOT NULL default '0',
PRIMARY KEY (user,topic),
INDEX (user),
INDEX (topic)
) CHARSET utf8 COLLATE utf8_general_ci

Although the subscribe options with email work visually, but I don't receive any emails, I've checked the tables and records are being inserted. No email though - if anyone knows, please give me a heads up.

cheers

http://bbpress.org/plugins/topic/subscribe-to-topic/page/2/#post-2648

You'll need to go into your SQL admin interface and run the following query (done by clicking on "SQL' on the top and pasting it in the box below that):

CREATE TABLE IF NOT EXISTS subscribe_to_topic (
user int(10) UNSIGNED NOT NULL default '0',
topic int(10) UNSIGNED NOT NULL default '0',
post int(10) UNSIGNED NOT NULL default '0',
last int(10) UNSIGNED NOT NULL default '0',
time int(10) UNSIGNED NOT NULL default '0',
type tinyint UNSIGNED NOT NULL default '0',
PRIMARY KEY (user,topic),
INDEX (user),
INDEX (topic)
) CHARSET utf8 COLLATE utf8_general_ci

Hope that helps.

I tested by posting a reply and I did not receive an email notification.

Any thought s as to what the issue is?

bbPress 1.0.2

Thanks.