For most installations the default method of sending emails will work perfectly well and no set up is required by you. In some situations you may want to send emails using smtp and this can be configured in the Admin settings under "SMTP set up".
To use smtp, you will require an SMTP server which may require additional costs although you may be able to use a free account.
This application uses PHPmailer class for smtp and you may have to refer to their documentation for the particular set up required for your smtp system.
You will require the smtp hostname, and its username / password.
Note also that you may have to change the smtp port. By default it is set to port 25 but it may need changing depending on your mail details. This change is normally done in the file 'class.phpmailer.php' using the line var $Port = 25;
Also, it is possible that your host may have disabled the required port, so you may have to ask your host to allow port through their firewall.
A suitable smtp relay service is authsmtp.com which requires port 2525.