You want to distribute papers for a regular journal club in your department.
Create a group for your journal club in FriendFeed. You can create a either a private group, where only group member can read and post messages, or a public group that is open to everyone. Then invite all regular participants of your journal club to FriendFeed and make them join the group.
Announce the papers that you want to discuss in the journal club via a FriendFeed message. For this go to the webpage for the paper you want to discuss (e.g. this paper) and then use the FriendFeed bookmarklet to announce the paper (and additional information such as the date of the journal club) in the FriendFeed group. If the copyright of the paper allows this, you could also post the fulltext PDF of the paper to the FriendFeed group.
Use FriendFeed comments to capture the discussion about the paper in the journal club. The comments can also contain links to other relevant papers and the slides you may have prepaped for the journal club. This is helpful for those unable to attend the journal club in person, or to look back at the journal club a few months later.
Nature Network forums, CiteULike, Labmeeting and Basecamp (and probably some other tools) offer similar functionality, so use the service you are most comfortable with. Of the tools mentioned, FriendFeed for me is the easiest to set up and use.
Email is not a good solution for regularly sending around large files. And discussions among a larger group of people (i.e. all members of a journal club) are difficult to follow via email. Google Wave is a good alternative without these limiations, but is not yet publicly available.
Many reference managers allow their users to create private groups for sharing references. But in order to work as a tool for a journal club, we also need messages/comments. Not only to discuss the paper, but simply to provide the date and presenter for the journal club or other organisational information. But I wouldn't be surprised if more reference managers besides CiteULike add these features in the future.
If all journal club papers should automatically be stored in a reference manager, use either CiteULike or put the papers for the journal club first into the reference manager and then export them via RSS feed into FriendFeed. This step can be automated if you create a group/folder for the journal club in your reference manager.