Although i don't do any emailing anymore i would guess that it still works by the amount of email marketers who generate sizable incomes each month. Saying email marketing is like saying TV commercials don't work, or magazine ads, or even direct mail. if it didn't work, people wouldn't be doing it.
I think emails marketing should be used only to your own opt-in list and don't just e-mail them all your affiliate programs. If you are sucessful than others, share your tips. It would build more trust than ever.