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Mail Returned as Undeliverable -- #5.5.0 smtp;550 recipient rejected

I have Exchange 2003 and Outlook 2003 as the mail client -- one of my users sent out an e-mail and it was returned as undeliverable with the following message:

There was a SMTP communication problem with the recipient's email server.  Please contact your system administrator.<mail.mydomain.com #5.5.0 smtp;550  recipient rejected

I'm not sure why this was returned - any help would be appreciated.  Thank you.
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f_umar
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Thanks for the assistance.  I was hoping it was not a problem with my server and I think you agree.  We are checking into the accuracy of the e-mail address the user is sending to but are pretty certain it is correct.