Well apart from sending you off to read the e-smith dokuments, I shall give a brief rundown off the "email server".
I shall talk about my server in this rundown - since I havent got a clue how yours has been setup!
MY server handles mail for fieldnet.de. I also have a domain name fieldnet.de and my webpage and mail services are also located @ my ISP.
My server has been setup to "keep" local users mail ie. for users @ fieldnet.de, but to send all other mails via my ISP.
So in thus case if user1@fieldnet.de wants to send a mail to user2@fieldnet.de then this mail never leaves my server. If user1@fieldnet.de sends a mail to any other domain then my server sends it on to my isp. The reason why I send it to my isp is that, although I have a static ip adress, lots of mail servers will not accept incoming mail from my server.
So users in my domain have the choice to either use webmail, or outlook.
When I am not located next to my server, then only webmail is possible, because I have not installed pop after smtp.
Schotty