it will protect anything in from the network. Its a firewall protection. Here is what its says
What's new in Microsoft Security Essentials?
This version of Microsoft Security Essentials includes the following new features and enhancements to better help protect your PC from threats:
Windows Firewall integration. You can turn Windows Firewall on or off using Microsoft Security Essentials.
Network inspection system. This feature enhances real-time protection by inspecting network traffic to help block exploitation of known network-based vulnerabilities.
New and improved protection engine. The updated engine offers enhanced detection and cleanup capabilities with better performance.
These features are described in more detail in the following sections.
Windows Firewall integration
Windows Firewall can help prevent attackers or malicious software from gaining access to your PC. When you install Microsoft Security Essentials, the installation wizard verifies that Windows Firewall is turned on. If you have intentionally turned off Windows Firewall, you can avoid turning it on by clearing a check box. You can change your Windows Firewall settings at any time via the System and Security settings in Control Panel.
Network inspection system
When your PC connects to a network, it can become vulnerable if the network is vulnerable. Studies of network vulnerabilities show that it can take a month or longer from the time of an initial attack report before a suitable security update is developed, tested, and released. This gap in protection leaves too many PCs open to attack. The network inspection system works with real-time protection so that you’re protected hours after exploits are discovered—not weeks.
Award-winning protection engine
Under the hood of Microsoft Security Essentials is its award-winning protection engine that is updated regularly. The engine is backed by a team of antimalware researchers from the Microsoft Malware Protection Center, providing responses to the latest malware threats 24 hours a day.
I would think that the server that sends your email to Outlook would have some virus detection, but I'm not sure. I only use Google Mail and Yahoo mail and both check incoming mail for viruses, at least that's how I see it.
Since I NEVER open an email or Attachments that I don't know, I have no problems.
Any attachments on Yahoo are scanned when I ask them to be opened.