I use Mailenable at home, comes in about 3 flavours now, a free version, without Webmail, but the other versions costs peanuts and include web mail, its nice, clean and simple. Don't forget Server 2003 has some E-mail functionalities built into it, I cannot remember exactly what, but its got some in there now for SOHO situations where you don't use SBS or don't need the full size of Exchange.
Yep- we use the internal email facilities of Server 2003 and it's fine for intranet use and small-scale deployment. It isn't a solution but it can work. Some of the Open Source solutions would be best though- something knocked up with an easy distro like Ubuntu might be a good start..
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