I feel so silly asking this.

I haven't worked with outlook in a while and I have developed an email newsletter (my first time ever doing so). What do I have to do so that it shows up in its html format.

I just did a newsletter myself by hand.

1) Downloaded free templates from http://www.campaignmonitor.com/blog/archives/articlestips/index.html
2) Made a nice table-based layout, with some CSS, based on these templates
3) Started testing in a web browser to start with
4) Then used a php script to send some mails out to different clients (Hotmail, Gmail, Outlook etc)
5) Made more changes

Took a good while this way, and I had to generate a plain text version as well when I was finished.

It's probably worth using something like Daytonina's suggestion if you've got the money for it!

are there any alternatives to campaignmonitor?
which ones do your recommend?
thank you!

If you're targeting Outlook specifically there is a very handy hack that I've successfully employed (this has been tested and works in Outlook and Mozilla's Thunderbird email clients - it will not work with webmail).

Use an iFrame to pull in HTML/CSS/JS even Flash from a secondary website. Send the email with the iFrame embedded and pointed to any hosted website. This is definitely a hack and a HUGE security hole, but it works.

If you know that you're specifically targeting Outlook (for instance, an internal corporate email), I'd recommend it.