I recently migrated a customer from XP and Office 2000 to Vista and Office 2007. They now have SBS 2003 (which includes Exchange 2003) and 7 Vista desktops with Office 2007. All 7 users use the Exchange server email storage and internal mail. 4 users also have POP3 accounts for external (internet) email. The customer does not have its own domain. I set them all up with Exchange accounts. I setup the users with POP3 accounts with the POP3 connector in Outlook 2007; the mail from the POP3 accounts is downloaded to Outlook 2007 and stored on the Exchange server (no users have .pst files). I set Exchange server as the default account in Outlook for all users.

This setup worked with Outlook 2000—Outlook 2000 would correctly deliver internal and external email. However, this new setup is having problems. When a user with POP3 sends an email, it actually goes through the Exchange server which sends it out externally. It should be sending it from the user's desktop (from POP3) and not going through Exchange.

When a POP3 user forwards an email with attachments to a user without POP3, the message is returned as junk mail.

Users with both Exchange and POP3 want to be able to send an email that has both internal and external addresses; the external email should be delivered from their desktops via their POP3 while the internal email should be routed via Exchange. How do I configure Exchange 2003 for this? How do I configure Outlook 2007 for this? Should Exchange be default or POP3?