SquirrelMail is all you will get as a default part of Mac OS Server, yes. Pity, but it does work.
You can easily install Roundcube webmail
http://roundcube.net/ which is a rather nice webmail tool, and free. This will give you good webmail functionality with a Mail-like interface. It might not work 100% with all web browsers -- I have a few problems with IE 7, but it works just fine with Firefox (on Windows and Mac), Safari, Camino etc.
Also worth a look is Atmail
http://www.atmail.com/ which is commercial software but has a free licence for a small number of users (5, IIRC). That works fine too -- and will also provide a replacement web calendar, and the bonus of a web address book (though I have failed to get that to consistently display contacts from Address Book server; but that's another thread).
simon
