Sorry...
I have Office 2003, but the program functions the same. Unfortunately, you are dealing not with an issue with outlook or an issue with MobileMe. The issue you are dealing with is with the whole POP thing.
With your POP e-mails, when you downlod info onto your phone it leaves the data there. You can set it up to delete from server when removed from inbox, but you will lose the ability to later download it onto your computer.
In POP, your computer is the master controller, but think of a POP server as a post office. It will hold your mail until you pick it up. But once you do, they will no longer store it for you. With the iPhone, they will allow you to peak at your mail but won't deliver it, so you have to manually tell them to throw away the read items.
As for Drafts, sorry, no can do. Drafts are always saved to the local machine. Again, as a post office, it will collect your mail and send your mail, but it isn't going to hold your half-written mail.
As for MobileMe account, what you see is what you get. You can, however, tell Outlook to "Purge Deleted Messages" under the edit menu while you have the MobileMe account selected. This will delete the items permanently and the will be unretrievable. If you want to keep a copy but want them out of your box, you will have to create a new folder and manually drag them there.
This is the opposite of POP. In this case MobileMe has your e-mail and your PC and iPhone allow you to read it and delete it. But the entire time, it remains in MobileMe's possession. You have to manually tell it to do everything. You can tell your iPhone to remove it from the server, but it would be easier to have your PC do it.
Remember, to PERMANENTLY remove deleted items: Edit > Purge Deleted Messages.
As for drafts on MobileMe, make sure your iPhone is set up under Settings> Mail, Contacts...> MobileMe> Account Info> Advanced> Drafts Mailbox. Just make sure "Drafts" is checked under "On the Server". That should allow you to save drafts. As for messages written on Outlook, sorry. All drafts are saved to the local machine.
Hope this helps.
