Implement Windows 2003 Exchange Server

Can anyone tell me if you can host your own POP3 email to avoid email hosting costs. I know Exchange Server 2003 is an email solution, but someone told me that they tried it once and it required everyone to have to email addresses.

Also, I was also wondering if I could host our company’s own website and base this email off of the website.

Any insight into costs and hardware requirements would be very appreciated. Thank you.