Like out look i need to implement the full fledge mailing functionality in sharepoint site. Is that possible to implement this? What are the possible storage location of the email?
You can hook announcement lists to "Incoming Email" ( http://technet.microsoft.com/en-us/library/cc262947.aspx ).
For outgoing you can add an event receiver/workflow on any other list for ItemUpdating/ItemUpdated and use SPUtility.SendEmail ( http://msdn.microsoft.com/en-us/library/ms460489.aspx ).