You appear to be confusing the mail type with the audience. Your user is a Lotus Notes user, retrieving their mail using a pop client, instead of a Notes client over NRPC.
The Mail system is a Domino server. The user’s mail is stored on the Domino server inside a Lotus Notes mail database. The person document you have created allows a mapping between a name and a database.
Change the “Mail System” back to “Notes” in the person document.
When the user accesses the server with their user name and password using a POP client over port 110, the Domino POP3 task will retrieve their mail from their mail database for them and pass it back to the requesting mail client.
One additional note: have you configured you Domino server to use “Internet Site Documents”, check the Basics tab of your server document if you are unsure. If you have configured your server to use Internet site documents you will have to include 127.0.0.1