Settings for outgoing Email

i am working in crm2007 version and trying to send an outgoing email from UI and once i send the mail and look back into my outlook sent items found no update here...and when i try to send mail from CRM system to my outlook id but not recieved any mail in to my outlook....but outgoing email Activity is created in CRM system...

could any one let me knoe what settings do i still maitain to have the above send functionality in total....

Thanks