I'm creating a web application using .net 2005 (C#)
with the features of email services , which should be like yahoo,gmail (with folder, contacts, options) , please any one guide me how to implement this using .net

I would buy a tools suite first, either Telerik or Component Art and then decide if I am doing database mail or cdo (collaborative data objects ) it is the root of all email processsing on windows

 http://msdn.microsoft.com/en-us/library/aa939193.aspx

http://www.outlookcode.com/article.aspx?id=20

As for a guide for impelmenting the contacts should be easy and the options as well...the tough part is the email spam/ email throttling and email queing which you will have to read on

best of luck

Check out www.mailenable.com.  It's a great service, their e-mail service is in .net, and you can gain access to some of the code.  And if you get in as a developer (which is open) then you can get first hand knowledge of their code.  I, though, do not know if everything is in VB or C#.