Exchange 2003 - The e-mail account does not exist at the organization this message was sent to (domain .local)

Need a bit of clarification: do you users have separate accounts for different email addresses (because separate accounts is the only way to use more than one mailbox), or do they just have more than one smtp address specified for their mailbox?
Your error message is quite straightforward and means that intended recipient address does not exist...

Hello,

For SBS domains is recomended to change the address template from company.local to company.net. This change, maked at Exchange server level, will modify your smtp address for each user to correct domain.
This change can be made at Rcipient Policy - Default policy.

Ugrum
I have 4 users each with one server account e.g. user1, user2 etc.
Their internal email address is user1@company.local
I have no internet for the domain (yet) i.e. www.company.com
Each user has a POP3 email account that is being used for work purposes until I get the www.company.com and email forwarding setup.
Hence, user1 would have user1@provider.net, user2 has user2@provider.net etc.
For user1, SMTP reply address is set as user1@provider.net and mail is successfully delivered to the recipients exchange inbox using Outlook 2003.
Sending and receiving works satisfactorily for each of the users apart from when user1 wants to send email to his other POP3 account on the same provider.net i.e he is unable to send to user1home@provider.net - that is when he gets the error indicated above.
Email can be sent to user1home@provider.net from elsewhere.
Hope this explains better.
Regards
Craig

Dan,
I have not yet changed to company.net.
I'll leave the Primary SMTP as user1@provider.net and exchange/local SMTP as name1@company.local (ditto other users) until Ugrum replies.
Many thanks for your interest and suggestion.
Regards
Craig

I'm afraid to be confused even more by your answer :)
The domain you reference as "provider.net", is it the domain hosted internally by your Exchange organisation? Or it is hosted somewhere else on the internet? I'm confused because you said that yhe domain has no connection to the internet, yet at the same time "email can be sent to user1home@provider.net from elsewhere". If it is not connected to the interned, how does this possible? Or by elsewhere you mean another users?
Would it be a correct representation for that problem: your users have mailboxes in your Exchange organization "userwhatever@company.local" and can successfully send email to each other; however, they are unable to send email t any external email domains which are not hosted by your Exchange organization?

Sorry, it all seems so clear in my head!!!
provider.net is actually www.manx.net - a local (Isle of Man) ISP
Yes, users have an exchange mailbox e.g. mailbox - username
i.e. server-logon username where POP3 mail is routed/directed to, which can be seen in the Outlook 2003 folder list (above personal folders) on the client pc.
From a browser based email system e.g. yahoo.com, I can send email to both user1home@manx.net and user1work@manx.net. The user1work@manx.net is received successfullly after being relayed/routed? thru my exchange 2003 server.
If user1 is logged on to the local domain server he can not send mail to the user1home@manx.net address.
I suspect either a mail relay/spam type restriction or my 2003 server thinking that manx.net is a local domain.
Any help or getting more confused?!?
Regards
Craig

This is a very common problem and most likely caused by a sender domain name verification on the receiving server. For example, your user which sends email from your domain (AD domain here) has a primary SMTP address set in Exchange to user@company.local. The receiving server (being email server for manx.net domain in our case) performs a check for the domain "company.local" and is unable to verify its existence. Well, no wonder since it is just an internal domain for AD setup! But the mail server will not accept mail from non-existent domains, and here goes your email message.

Err meant to say error message, not email message :)

How to fix it? Register a valid internet domain and make sure that all users in your Exchange organization which need to send mail to outsite have a valid email address in that domain configured as their primary SMTP email address. Primary address is displayed in caps when you view it through AD users&computers.

That's the only solution I know, unless you will be able to make a deal with administrators of receiving email server so they will accept such email (coming from non-existant domain) from your ip address.