Decided to use Growl for notifications and turn off the built in ones and I'm not getting Growl ones. Everything is turned on properly in both Espionage and Growl (1.1.5), but nothing. Other Growl notifications from other apps are working properly.
That's very odd, we've tested Espionage with the latest version of Growl and it works just fine...
Try logging out and logging back in. Then perform some task that should show notifications like unlocking/locking folders, make sure you've enabled Info notifications in the Notifications preferences first though.
If you don't see them can you check the contents of the system log? Espionage has a short-cut to it in its Help menu. Check to see if there are any messages associated with Growl, you can just filter for "growl".