I get this in Outlook whenever I connect to a locally hosted mail server. Do I solve this by buying a SSL Certificate say from Go Daddy?
Yeah, you may have to deal with SSL warnings like that when not using a commercial certificate. Buying a cert from someone like GoDaddy (who only charges $20 or so a year) is a quick way to resolve that issue :-)
There are likely other ways to resolve it too -- I imagine Outlook could be configured to trust a given self-signed certificate. I'm not an Outlook guru though, so I'm not sure which steps you'd take to do that :-)