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right.. a domain name on its own is not going to just work and give you an email service! Where did you buy it from and did you get webspace or an additional email service with it?
£24!!!! was it a .com domain name? anyway.. you needed to have choosen one of those packages in order to use the domain to receive email. At the moment it sounds like its just the domain name. Check through the order you placed and see exactly what you have signed up for... what ever made you chose that site to register your domain with? You can get free webspace, but to be honest Id pay for something decent with "C-panel" access... The domain names nameservers will have to be changed too... its all easy to do but first distinguish what you have paid for.
your username will be something like hello+yourdomain.com then put your password in. the incoming and outgoing mailserver will be something like yourdomain.com or something related to your internet service provider like smtp.orangehome.co.uk
I really cant help much more as my setting might be differnet to yours...it just depends on how the company you registered with handles its email clients... see if they have any help pages and if you still have troubles then email them and ask for your POP3 details so that you can use outlook!