Setting up trac on dreamhost isn’t a very well documented process.  The one-click install does setup a project, but your left with bare bones install and no help on getting the initial admin account created.  I found the dreamy-trac installation script worked well.  Beyond this and the basic config changes you have to do I found the following settings are required in your trac.ini file in order to get your email notifications working on Dreamhost when you use GMail as your mail provider.

[notification]
smtp_enabled = true
use_tls = true
mime_encoding = base64
smtp_server = smtp.gmail.com
smtp_port = 587
smtp_user = user
smtp_password = password

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