Postfix is like sendmail, it's a daemon that will send email. Dovecot is a pop3/imap daemon that will receive mail for you. SquirrelMail is a web based front-end like gmail or hotmail.
If people will be using an smtp/pop client for email then you probably will not need squirrelmail.
Configuring this stuff is beyond my scope, but I'd read a few howto's to get going.
Also before you get started you'll need a domain name and setup your DNS records appropriately, MX records and things.
I tried doing this at home once with dynamic DNS only to find out that my ISP shuts down SMTP/HTTP and POP connections.
Here are a couple of HowTo's to help you get started:
Hope this helps,