While hosting is great for basic email needs I think it's always best to go with a company that specializes in email if your looking to send newsletters. If you're sending newsletters you need to ensure that the delivery rate is high and that you have access to sophisticated statistics.
I personally use AWeber but I had a great experience with Mail Chimp and I've read some positive reviews for Constant Contact.
█ Zomex ~ Templates & services for web hosting resellers since 2009!
█ #1 Responsive whmcs templates | WHMCS | Wordpress | HTML5 | Settings area
█ Hire us for responsive whmcs integration - enhance your website using the new "Six" template!
MailChimp is very awesome. I think they just upped their free plan to something like 2,000 subscribers and 12,000 messages sent per month. On top of that, they have great analytics and tracking, lots of awesome features (like the ability to have a newsletter go out at the 9am in each time zone), and integrations with lots of third party software and services.