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Recently, our IT department has installed Microsoft Office Communicator 2007 R2 on our machines. I have disabled the last two options in the Options -> Personal tab (see the screeny below).

Can the IT department now track/monitor our instant messages between me and other colleagues here?

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Yes

All the communications on Office Communicator is stored on the server as well, apart from being stored in Exchange. As the product is catered for the corporate environment, all e-mail and communications internally legally belongs to that corporation.

This ability to check this on the client is only to allow you to have access to what is being logged, and can also be controlled centrally.

Voice calls however can only be logged if the infrastructure for this exists. We run this across a 5000 user network and have it enabled, storage for all this data however becomes great fun.

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