This is going to sound negative, so I'll start off by saying it's good that you're actively trying to improve the site. I wouldn't want to think you were sitting still and letting it run itself. And now that the change has settled down a bit, I'd say it's actually quite a good feature and it looks to be well written.
So with that all said, lets move on to the constructive criticism...
It's replaced the envelope icon linking to the "recent activity" page, which I think is a retrograde step for a number of reasons:
Firstly, the envelope gave good visual feedback when something had changed which I hadn't previously seen. The new feature doesn't; I have to actively pull up the drop-box to see the recent changes, and even then it doesn't show me what's changed since last time. And I haven't yet worked out what the definition of 'recent' is in this context.
Secondly, the box is too small to usefully show large amounts of changes. I haven't had many changes to worry about since it showed up, so I don't know exactly how it would handle it, but if I did have more than a handful of recent changes, either the popup box is going to grow to a silly size or it's not going to show everything. Either way, it's not going to be ideal.
Thirdly, although the recent comments feature of the envelope is duplicated by the Stack Exchange popup on the left hand side of the toolbar, the envelope was always significantly quicker at reporting new comments. Presumably this has something to do with the Stack Exchange popup having to check all sites and so maybe doing a whole round-robin before reporting anything? Whatever, it's a lot slower, and I like seeing and replying to comments while they're still fresh.
One thing in general about the hover popups that have been implemented here recently: they can get annoying when they pop up when you're not expecting it. The tag info popup is particularly bad for this, since tags can appear anywhere on the screen, but I had it just now with the new profile popup as well. It's also not consistent - I've found that most of the time it just pops up, but occasionally I need to click it to make it pop up. Plus, it's inconsistent with the Stack Exchange menu on the left, which always needs a click.
Finally, I would like to comment on the way this has been handled. I'm all for agile programming and "release often/release early", but the number of votes and comments on the "Eeek" thread says a lot. I don't believe there was any need to remove the envelope icon prior to implementing this new set of features. The envelope is small enough that it could have been left in place while the new code was bedded in. It would have given people time to adjust and find their feet with the replacement features. You might also have been able to see (by continued clicks on the envelope icon) whether and when your new features had succeeded in making the envelope redundant.