As Alexander points out, Alfresco does not come with its own mail server, so you will have to use an exiting server, or install one. According to what I've read, it can not connect to a secure server. I installed Postfix on the server running alfresco and added a file to my extension folder with the email settings. In my case, I am using tomcat and the extension folder is:
/var/lib/tomcat5.5/shared/classes/extension
Name your file something like email.properties or custom-repository.properties and include the below with
the settings for your mail server…
# Email configuration
mail.host= mymailhost
mail.port=25
mail.username=anonymous
mail.password=