I built a customized Drupal/CiviCRM deployment for our small (11 staff, 45 volunteers) nonprofit. Written in PHP, it is a very flexible system. However, you will spend a lot of time chasing bugs and dealing with a poorly documented codebase. For my next project, I'm staying away from CiviCRM until the project matures a bit more.
CiviCRM doesn't integrate with Outlook. It does have it's own web-based mail client, but it's clunky and no one in your shop will want to give up Outlook for it.
It does integrate nicely with PayPal. Needed to hack at it a bit to get it working, but once it was set up, worked like a charm.
If you're on Drupal or Joomla anyway, and you have a development server available for testing, I say go for it. If you want something that will work "out of the box," look elsewhere.