Yes, it is very easy to setup out of the box. They recommend a 1GB Ram server because ClamAV, Spamassassin and their one other anti-virus product (can't recall of the top of my head) can be resource intensive. They do however include instructions for removing clamav and the other resource intensive products for those who wish to use it on lower resource platforms (read: you may be able to use it with all the anti-virus stuff on lower resources, it just doesn't get along with a large amount of users trying to do a lot of work at once). iRedMail is setup on Debian and CentOS with 3-4 commands total. The only choices you need to make I believe are your default domains to use and weather you wish to use OpenLDAP, MySQL or Postgresql for the db part of the server. I usually opt for MySQL as its the easiest to interact with.
Hopefully this helps you out @Amitz!
Edit: I would suggest installing from a vanilla OS install if you can as you could run into unresolved issues if something it needs already has an older version installed or isn't where it is looking for it. I haven't had these issues because all my installs of it have been on new servers, but as I see @buffalooed saying he had issues, this might be why.
I understand that the non-paid version of iRedmail comes without any webpanel, is that right? Is it still easy to manage? Or is there some kind of trimmed/downgraded panel that comes with the free version?
Backups are no problem and go without saying. I spend more money in total for my backup servers than for the ones in production...
There is an administration panel that comes with it, but you are right in that it is very limited (and also has a shameless plug for the paid version on it). It allows you to setup domains and manage them, but you do not get all the bells and whistles. iRedMail is more or less the administration panel, the webmail service its self is provided using RoundCube.