how the server works and it manages the mailing function....?

Answer 1

When you say server I am thinking its as an Server OS, with some server (IIS, Apache insatleld on it).
These servers like IIS and Apache are a bunch of services which runs in the background. These services in turn has got many processes which waits for the user requests.
Lets see how the mail will work. A mail server will has a process waiting for incoming mail. The moment any mail comes, this process will wake up and add it to the corresponding recipients inbox. Offcourse, this is the most primitive job. There will certainly be many other processes which will process the mail, parse it, check for attachment, check for virus and so on.
In short, these are bunch of processes, which synchronise with each other.