Do we need PHPMailer? We are building our website in Drupal 7. However, I wonder whether we need to configure and setup the PHPMailer module. 

We are designing an ecommerce website that will send an email upon registration, online purchase, forum activity, etc.
We are confused about whether we need to configure PHPMailer in Drupal 7 or we can make use of Google SMTP services. We are totally clueless about this as we have been struggling to setup the PHPMailer.
You don't need PHPMailer. You will need an SMTP server of some description.

If your server is Linux, you will need to install some method of sending email such as postfix. You could either let the server distribute email itself, or configure postfix (or whatever) to relay it to another email server.

If it's Windows, I believe you can configure PHP to use an external SMTP server without needing one on the Drupal server itself.

If you were set on sending messages through Google's SMTP servers, you will probably want to use PHPMailer, as it's set up to make that sort of thing easy. Getting hold of your own SMTP server is not tremendously difficult, however.

Can you tell us more about your hosting environment? Maybe we could be more specific with the answer.