Is outlook supported on an Exchange server? The answer is Yes!
http://technet.microsoft.com/en-us/library/aa996719.aspx
It is supported to install Outlook 2007 on the same computer on which you have installed Exchange 2007.
Why install Outlook on the Exchange server?
In Exchange 2007 (RTM, SP1, SP2 and SP3) and Exchange 2010 RTM, Outlook was a requirement to use the import/export from/to PST files powershell cmdlets as it used API's from Outlook to perform these operations.
In Exchange 2010 SP1 Outlook is no longer a requirement to use the import/export PST cmdlets in powershell.
For small organisations installing Outlook on the Exchange server is ok!
For large organisations it is best practice to install the exchange management tools on a Windows 7 PC or management server with Outlook.
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