That includes, but probably isn't limited to:
new posts in anyone's journal, new comments for any post, LiveJournal.com makes a new announcement, All comments in my journal, on any post, Someone adds me as a friend, Someone I invited creates a new journal, I receive an invitation to join a community, Someone requests membership in a community I maintain, One of my friends uploads a new userpic
If you're a permanent account holder, you can check it out here:
Thus far, it looks like things are just going out via e-mail, but other methods of communication have been examined. I believe talks of Jabber, a RSS feed, and text messaging have come up as alternative routes of notification.