Project origins: The need arose in our organization for the access of email and address books from anywhere in the world. Obviously a Web interface is ideal for this, given that the user has access to the Internet. After reviewing several open source projects we realized that we were going to need to do some fairly major customizations to get things to be a nice fit for our needs. So the decision was made to create our own for some of these reasons, and for fun (we really like PHP). We decided to open source the project to contribute to the community that has contributed so much to us.
Stability: SquirrelMail is stable enough to use in a production system. It is, in fact, already used in several production systems around the world, handling thousands of users per system. There might be some bugs - no project is perfect - but they are most likely minimal. We test pretty thoroughly before releasing a version marked as "stable".