Has anyone had any success offering a webmail or email service to members? Can it be profitable? Does it help branding? What are conversion ratios like?

I might use it if it where availible

I am not sure, with gmail, hotmail and yahoo providing large amount of disc space the temptation to go for a bigger mailbox with another domain name has gone down. People usually prefer gmail, hotmail or yahoo because of additional benefits that come with it. I personally havent had any success with offering email/webmail service to members, you will notice that quite alot of members will ask for an email address but not even 10 percent of them will end up using that email address.

i have seen it become popular on such sites as animenation and aliensoup.com. it really depends what you have to offer

I've I think 2 permanent forwarding addresses at sites I'm a paying member of.

The term "I think" should tell enough, I never use either of them.
Maybe the fact that I run my own mailserver has something to do with it but in my experience the only people who such services are really useful for are those connected to ISPs that don't offer email accounts at all (if such still exist).

They're also really useful for people who need a junk account or a throwaway account to spam from. Could be a waste of bandwidth or a liability just waiting to happen

We are about (inside info , don't leak!) to give out free forwards for vbulletin fans - to our vbulletin.nl regular members. Unfortunatly I can't say much more about this at this time, but the plan is to be nice and give something back for their contribution by offering free mail forwards so they can show off how much of a fan they are.

Forwards is an interesting idea because it doesn't eat all the space and badwidth. But on the other hand, you're still liable for spam accounts and accounts used for illegal reasons, associated with your brand, server, and IP block.

I have a way to avoid that a little bit, and we are quite drastic with revoking accounts too. So hopefully it will work out.

Do you mind explaining it a bit more? I'm seirously considering offering an e-mail service but these are the reasons holding me back. What type of protections do you have in place for yourself?