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how to setup secure email(exchange2003 Outlook2003)

I've been asked to secure our email system so that external emails are signed & encrypted. I've read lots of docs, but am at a bit of a loss.

It looks like I need to buy certs from Verisign (or similar) for external parties to be able to trust the content (instead of getting them to install certificates from an internal CA server here). Am I right about that, and how does the encryption work then?

It looks like Exchange & Outlook 2003 have the capability to deal with secure emails, but I don't know where to start putting it all together.

Thanks in advance.

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