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Outlook 2003 can't send reply messages: error 550 undeliverable

We just switched over to new Windows 2003 servers and Exchange 2003.  I have started the process of converting our users to Outlook 2003, but we came across a problem.  The Outlook 2003 users are not able to reply to any messages from people outside of the company.  They can send new emails to the outside world just fine.  When they send a reply message, they immediately get a response email from "system administrator" with the following information:

Your message did not reach some or all of the intended recipients.

      Subject:      RE: test
      Sent:      5/11/2005 11:21 AM

The following recipient(s) could not be reached:

      "*******" on 5/11/2005 11:21 AM
            550 not local host ******.com, not a gateway

Our Outlook 2000 clients can replay successfully to any email and don't seem to have this problem.
(I used ***** in the email body, where the email address and mail domain are actually listed)
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jbobst
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jbobst
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SembeeCommented:
Are you using any SMTP Connector or SMART HOST on the new server?

Simon.
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jbobstAuthor Commented:
I don't have any SMTP connectors setup, and I don't know what a smart host is.  (I am not sure what an SMTP connector is either, but I see a folder group icon in my exchange server, and it is empty)

I did change a setting in my Outlook 2003 however.  I put a checkmark in the "my outgoing SMTP server requires authentication" box, and now things seem to be working.  I don't really understand what that means, but I didn't have to do this with Outlook 2000.
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SembeeCommented:
Are you connecting to Exchange with POP3/SMTP or MAPI (choosing Exchange server from the wizard).
Exchange 2003 is a lot more secure for relaying, so authenticating outbound email is a good thing.

A smart host is another server to forward email to. Usually your ISPs SMTP Server.
An SMTP Connector is a configuration on Exchange that is used to send email in a direction other than what Exchange can find for itself, such as your ISPs SMTP Server or another SMTP Server.
Most common reason for these to be used now is because ISPs are blocking traffic from dynamic IP addresses and you need to send email via your ISP.

http://www.amset.info/exchange/smtp-connector.asp

Simon.
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