Hi Arthur
Salesforce actually does integrate with Outlook through downloadable 'plug-ins'. These 'plug-ins' allow you to synchronize contact information, calendar events, tasks etc (
http://www.salesforce.com/products/s...ok-edition.jsp). and allow you to do the majority of your CRM through Outlook itself. I have deployed this configuration into businesses in the past and it works well.
The 'plug-ins' are available for all Salesforce editions including "Group Edition" which is currently priced at around $99 per user per year.
As Devan suggested, SugarCRM is also worth looking at in either hosted or local configurations.
Please feel free to get in touch if you'd like further information. I have no affiliation with any CRM software provider but do have experience in this field and would be happy to provide some impartial advice.
Greg
Technical Director
Venix -
http://www.venix.com.au