Depends how complicated you want to get.
Sendmail sends and recieves mail fine but local delivery is to the system mailboxes which require a seperate system user account for each mailbox. You can access these via pop3 if you enable the ipop3d daemon that comes with linux.
This is fine for a few mailboxes/one domain. If you want to host multiple domains/lots of mailboxes you need something more.
I personally run qmail with various add-ons, which gives me virtual domains, web admin, and pop3/imap access. For guidance on hoe to set it up, I can heartily recommend
http://www.lifewithqmail.org which has a step by step quide to getting it running. (Note qmail replaces sendmail on your system).
Another alternative is cyrus-imap which I believe is quite popular.
Hope this helps.