Personal Folders allow you to store messages off of the mail server. It allows you to keep more messages than you normally would if you had them all on the server. The only limitations with Personal Folders are that the message that are stored within them are available only on the machine that they're saved on and you won't see them if you log into Outlook Web Access. Here are instructions on setting up Personal Folders.
The first step is to click on the File menu, then New, and then Outlook Data File.
It's usually best just to pick the first option on this screen. The exception is if you're planning on copying the personal folders file over to another machine that's running an older version of Outlook. If you're not running Outlook 2003 or later, you most likely won't see this screen.
This screen allows you to determine where the file is actually stored. The default will be on your hard drive. You can save it there or onto the Q: drive. If you decide to use the Q: drive, the messages won't be available if the server is down. If you want to change the location, use the navigation buttons at the top of the screen to navigate to where you want to save the file. You can also change the name of the file itself. You'll only need to do this if you plan on having more than one set of personal folders.
This allows you to set the name of the personal folders group. This name is what will appear in the nagivation bar on the left-hand side of the screen with the rest of your folders. Again, this is useful if you plan on having multiple sets of personal folders. You can also set the type of encryption level. The default is recommended. You can also set a password for the file that'll be required before anything will be accessed. Click on the OK button to finish up.
That will do it! Your Personal Folders group will be set up and should show up in the navigation bar on the left-hand side of the screen.