Sure it is possible to mail someone if the script has one or more error.

First things first. I made some small modifications to you script. Just to make it comply to best practice scripting. I did not test after the modifications it so be careful implementing it in a production environment.

 Code:
;KiXtart script to Copy Database backup files from a production to warm server

;Remove old Log File
$LogFile = "e:\SQL Batch CMDs\Output Log\Copy_full.log"
$subject = "SmartStream Copy Full " + @DAY + @DATE + @TIME
If Exist ($logfile)
	? "Deleting Old Log File"
	Del $logfile
	If @ERROR<>0
		$LogItem = Log("Error Deleting " + $logfile + " Error number " + @ERROR,$logfile)
	EndIf
	Sleep 2
EndIf

;Create Log File

? "Today is " + @DAY
$LogItem = Log(@DAY + @DATE + @TIME + " Begin Process",$logfile)
$LogItem = Log(@DAY + @DATE + @TIME + " Start Compression",$logfile)

;Compress .BAK files into .zip package

? @TIME + " Compressing Files"
Shell ('"c:\program files\winzip\wzzip -a -ex -P -r e:\SQL Backup\ss-full-"' + @DAY + "-" + @YDAYNO + '".zip E:\SQL Backup\Data\*.*"')
$LogItem = Log(@DAY + @DATE + @TIME + " End Compression",$logfile)
Sleep 3
$LogItem = Log(@DAY + @DATE + @TIME + " Start Copying Files",$logfile)
? @TIME + " Copying Files" 
Sleep 8
Copy "e:\SQL Backup\ss-full-" + @DAY + "-" + @YDAYNO + ".zip" "\\HQGEAC2\e$\SQL Backup" 
$LogItem = Log(@DAY + @DATE + @TIME + " End Copying Files Error number " + @ERROR,$logfile)


;Delete .zip package from production server once .zip package successfully moves to warm server

Del ("e:\SQL Backup\ss-full-" + @day + "-" + @ydayno + ".zip")

$LogItem = Log(@DAY + @DATE + @TIME + " Process Complete",$logfile)

Sleep 20
Exit

Function Log($Message,Optional $LogFile)
	Dim $LogFile
	; Check parameters.
	$Log=''
	$LogFile=''+$LogFile
	If 0=VarType($Message)
		Exit(1)
	EndIf

	If $LogFile
		; Check if logfile directory exists..
		If ReDirectOutput($LogFile,0)=0
			? "$Message"
			$=ReDirectOutput("")
		Else
			Exit(3)
		EndIf
	EndIf
EndFunction


How to mail someone if there was some kind of error?
Lots of ways to get you there. I use Blat.exe to send e-mail messages from my scripts. Don't have an example at hand here right now but is it very easy to sue blat from a kix script.
http://www.blat.net/
http://www.blat.net/examples/kix.html
_________________________
Mart

- Chuck Norris once sold ebay to ebay on ebay.