The E-mail Router is used to provide CRM a way to send e-mails and to automatically track e-mails (according to the user's preference).
If you don't use the E-mail Router then the CRM client for Outlook can be used to send and automatically track e-mails. However, I recommend the E-mail Router because sending e-mails happens even if a user doesn't run Outlook.
The E-mail Router must be used for queues.
If you don't install and configure the E-mail Router or use the CRM Client for outlook then CRM cannot send e-mails.