SBS2008 - POP3 Users requiring to send through Exchange 2007 SMTP Server

Yes Exchange 2007 is setup and working for our domain name.  The pop3 connector is working and users can POP into the server external IP address on 110 and retrieve mail no problem.  

The external users are using POP at present at the request of managment due to storage requirements.  

The users using POP are machines that are not on the domain, and either external i.e from their homes or laptops that are not owned by the company that physically plug into the local network to retrieve POP email.

What we want is POP users to be able to send through the mail server instead of their ISP so we can put transport rules etc on the outgoing mail from these POP users.  

Also things like scanners and Backup software requiring a smtp address for alerts should use the internal SMTP to send at the moment but cant - even when authenticating.

This is a weird setup. You are in risk of losing vital emails, which I believe you need to keep for compliancy.

For external user you need to enable RPC over HTTPS - http://www.amset.info/exchange/rpc-http.asp or what they call Outlook Anywhere - http://technet.microsoft.com/en-us/library/bb123741.aspx

I realise this but these are not vital emails and i am aware that i can setup outlook anywhere and have it inplace already.  

We dont want to store these emails on the server - POP is what we are after at present.

There is no guarantee that you will be able to send emails through your server.
A lot of ISPs (not enough in my opinion, but that is another matter) block port 25 outbound on their networks. They require you to use their SMTP servers. The only way round the issue is to use RPC over HTTPS/Outlook Anywhere which provides a connection to Exchange which is not SMTP based.

Otherwise, both SBS 2003 and 2008 allow relaying through their servers by default. No changes required. However you must authenticate when sending. Enabling the option to use the same credentials as inbound is not enough - you need to explicitly set the credentials as domain\user name and then the password (which is different to the inbound authentication).

Simon.

msha094, how many users are we talking about that require this type of setup?

You might just want to add these users to your exchange and limit their mailbox size and setup up auto-archive on the client machines to clean up every 7 days.  But going back to my previous question, how many users are we talking about for this setup?

Approximately 10 mailboxes are requiring a box.  I may have been authenticating wrong.  DOMAIN\username is the right way to authenticate you say?