ClickZ: Email's Getting More Personal. Should You?

It's dubbed dynamically generated content, one-to-one personalization, and profile-based customization. Basically, we're talking about delivering an email to an individual that's customized based on information in that person's profile. Going beyond mere mail merge capabilities (like inserting a person's name), dynamically generated content can involve almost anything in an email: customized text, modified images, a special subject line, or offers tailored to that individual. A single deployment can involve thousands of different versions of the same email if the list is large and diverse.

The article states that you need good data quality to start with, and that personalized e-mails work better in some industries (e.g. computer hardware) than in others (e.g. apparel.)