This is absolutely true- Someone else just forwarded me this link so I realize these posts over a year old now but hopefully they will be seen.
I received this very same email message from Go Daddy today (Monday, July 16, 2012) because a few days ago a member of our networking site sent an email (invitation) to someone they did not know. I assume they also did not know this was just some poor lonely pathetic <snip> woman somewhere in Ohio who has nothing to with her time but troll around the Internet stirring up trouble with people she resents and who have better things to do than engage in drivel with her.
We wrote back telling GD about this and they wrote back with another scolding so we replied again with basically "We have said we are not sending out these messages and to go away and leave us alone, we are not interested in hearing from you on this matter anymore...". That is when we got the "extortion" letter.
I called GD on the phone (their 24/7 customer service has always been excellent in my opinion) and they verified this was indeed and authentic message from Go Daddy.
However it does not matter now as we have already transferred the domain names. I was told that this was because of ONE SINGLE complaint, not several like someone in this thread said. Most people receive tons of "spam" every day and simply ignore it. Yes, spam is annoying but in the grand scheme of things it is nowhere near the worst thing in the world. It's just that trolls like <snip> have nothing productive to do.
Someone in this thread suggested to another to just pay the $199- Why in the world would you do that just because GD demanded you do?