Steve's answer did hold some grain of truth, hidden in the sarcasm. Email has been deprecated a bit in the marketing realm because there's so much crap we all get in our inboxes these days that people are apt to ignore it, even if you provide some sort of incentive - like "$20 off first purchase at yourwebsite.com!" will probably just get deleted as spam. I definitely would consider alternative realms for a first contact, and ask all customers to opt-in to a newsletter if they desired to later on.
For a first, initial impression, especially for local and small businesses, consider doing more "personal" stuff - maybe chamber/commerce stuff or other networking opportunities. Or if possible, phone calls or actual visits (though they obviously are more time-consuming, they can obviously have a lot higher % rate of success than an email).
If you do send emails out, at any time, I think people by now are used to getting HTML emails. Most e-tailers I get stuff from use them, and places like Constant Contact give people a lot of options for making an HTML email that I would think a lot of their customers would use them. Just keep it simple and don't link in too many graphics.