100% Agree its one of the oldest and one of the best practices of internet marketing.

Having a good communication with your clients is very important, If you can provide them with informative content, freebies , new deals, features and service upgrades, TOS updates etc etc

And when it comes to the frequency of the news later, i think the best would be once every 2 weeks or once every month, coz as someone earlier said, If you send you news letter 3-4 times week, then it can be a pain to the client and there's a great chance of having your news letter mark as spam or unsubscribe from your news later for good

So having a news latter is very good but make sure to have the news letter frequency in a low level