User gets email, that his account was activated and ready to use
User does not get a email
Using PHP Mail or SMTP Mail, does not matter
The activation email is sent to the user, when the admin is using the activation link in the email (which he gets when a new user has registered and verified his email adress).
But when the admin is going to activate the user in the backend (instead using the link in the email), the user does not get a email notifying him, that his account is now activated and ready to use.
In my opinion this should be fixed in the joomla core code, i am afraid to use a year-old patch