The "test" notification doesn't reference the actual notification handler that is used during an alert. If it's still giving issues, go ahead and post the contact config that is having issues (minus private data).
Are notifications enabled for the specified users? Configure->My Account Settings->Notification Settings.
The following document outlines what contact settings need to be in place in the CCM for notifications in XI to work correctly.
http://assets.nagios.com/downloads/nagi ... ndcontacts