It's not the best documented installation for Outlook, is it? As a newbie, I went through the same earlier this week. I had the same impression that I was supposed to be doing something in Outlook or that I would at least notice the server's changed to 127.0.0.1 and the login name changed to include the server name.
Turns out if you're using Outlook, virus checking is automatic and there's nothing you need to do with 127.0.0.1 or pop3 addresses. As I understand it, if you're using outlook and you get avast!'s splash screen when you start Outlook, you're protected (assuming you haven't changed any options and disabled email checking).