The script you're looking at allows visitors to email a link to the entry to their friends. That's the same as MT's native Send Entry function, but this extension allows more options.
If you're talking about the notifications that are send to subscribers when you add a new entry to your blog, that's something different. Unfortunately, when you include the full text of your blog entry with the notification email, it doesn't parse the HTML but leaves the HTML tags there. I dislike it myself.
You might look into
Bloglet, which is a third-party service. The easiest way to use Bloglet is to give it the URL of your RSS feed and it will take the entries from there.
Bloglet sends out a single notification email each day for all entries added that day. The service can be flaky sometimes but if you really need to display HTML properly in your notifications, Bloglet may be the best choice.