Its still in-progress with I estimate about 2 weeks effort left to complete the first version. I know I said that before but I have been side tracked and haven't yet put in the 2 weeks of effort on it. Some of what has side tracked me has been developing nice controls and layout tools for Site Office and I'm leaning towards making the Newsletter administration plug into Site Office. This way I can both deliver the Newsletter and get the plugin model for Site Office worked out.
My updated goal is to ship a new release with Newsletter by the end of December.