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Offline Address Book. Publish to web and public follder check box grayed out

I had an OAB problem with the introduction of my first Exchange 2007 mailbox server in my Exchange 2003 Org. A 2007 Outlook client could not download the Offline Address Book. I made the Exchange 2007 mailbox server the OAB generator and updated the OAB. Not my 2007 client can download the OAB but my 2003 clients are not getting updates. I suspect its because the option. "Publish to Public Folder" is not checked, but, I can't check this or the web distribution because the boxes are greyed out. What did I do wrong? This is making my crazy.
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You should have a public folder store on the server. Do you have one?
If not I would suggest that you setup one.
Have you replicated the OAB system folder from the Exchange 2003 server?

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I do have a Public Folder Store (actually referred to as database now) on the Exchange 2007 server. It was there after the install. Yes, I have created a replica of all the 2003 System folders on the Exchange 2007. I also replicated the Exchange 2007 to the Exchange 2003. I have to believe the reason 2003 clients are not seeing updates is because the this check box. Now that the Exchange 2007 server is responsible for generating the OAB, if its not publishing these updates to a Public Folder, Outlook 2003 users will not see them. This brings me back to my original problem that the check box is grayed out and unticked. The same for Web distribution check box.
I am well aware of how the public folders are described - I have been working with Exchange 2007 for over two years.

I suspect that the change in the OAB generator hasn't gone through correctly. I would switch it back to Exchange 2003.

Then you need to look at why the Outlook 2007 clients will not download the OAB. Are those clients pointing at the Exchange 2003 or Exchange 2007 server?

There is a typo in my original post. What I meant to say is "Now", instead of "Not". If you read it again and ignore the typo, you will see that my Outlook 2007 clients can download the updated address book after making the Exchange 2007 server the OAB generator. Its the Outlook 2003 clients that are not getting the updates. By updates, I mean new additions to the GAL. As I mentioned, I suspect this is because this check box "Enable Public Folder Distribution" is not checked so new additions to the GAL are not getting pubished to the OAB Public Folder and hence the Outlook 2003 clients are not seeing the updates. I done dozens of searches on this topic. Its a common issue but no one has a solution. I am sure its something I am doing wrong but I don't know what. Also, if I switch it back to an Exchange 2003 server as the generator, the problem reverses itself and Outlook 2003 users will see new updates and 2007 will not. To clearify, neither client version is getting an error downloading the OAB. Its just the 2003 clients that are not getting the latest OAB.
The OAB generation isn't working correctly and the clients are stuck on the old one that was generated when it last worked.

Have you tried using EMS to set the OAB settings?
This is the home page for the relevant section on Technet:

Trying to set the OAB through Powershell may well give you a better idea of why it is failing than the GUI.

I am not sure its not working. When I run update on the Offline Address Book object using the Exchange 2007 EMC,  new entries do show up in the address list but only for Outlook 2007 clients on the Exchange 2007 server. Outlook 2003 clients on the Exchange 2003 server do not see the new entries in the GAL. Seeing 2003 clients get their updates from the Public Folder, not the web based OAB, i keep going back to the check box that enables Public Folder Distribution. If the updates are not going to a Public Folder, Outlook 2003 clients will not see them. I have read this article. The section below explains my point:

Public folder distribution   This is the distribution method by which Office Outlook 2003 or earlier clients that are working offline or through a dial-up connection access the OAB. With public folder distribution, the OAB generation process places the files directly in one of the public folders, and then Exchange store replication copies the data to other public folder distribution points. Public folders are maintained by using the Exchange Management Shell.

If I am to understand this section, if the check box is not checked, updates will not be published to the OAB Public Folder and Outlook 2003 clients will not see new entries in the GAL, which is what my problem is.

I have read that some admins have deleted the legacy Offline Address Book and created one from scratch using the Exchange 2007 EMC which then allows you to check these boxes, but doing this in a VM environment caused OAB Public Folder issues. I had duplicate OAB folders for all three versions of Outlook (2.0, 3.0a and 4.0). This completely hosed up my 2003 clients to the point where they would not even download the OAB anymore.

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What was the final solution from Microsoft on this?  I have the same problem.

I love finding these...  What was the fix?
I had the same problem, and for me it was to enter this in the management shell:
Set-OfflineAddressBook "Default Offline Address List" -ApplyMandatoryProperties
I think the whole issue was I could not select the check box to publish OAB information to a Public Folder. It was grayed out. This was because the server that generates the OAB was still an Exchange 2003 server. When I changed this to be a 2007 server, the check box was enabled for checking which publishes OAB information to the Public Folder as well as use 2007 web serives.After doing this, both clients were able to see OAB information.

Looking back, it makes sense because 2007 uses web services to distribute OAB information and 2003 clients still use Public Folders. Therefore, information needs to be published in both places if you still have 2003 clients.
Gotcha - I had moved the role and waited a while to see if the settings would become available, but they never did.  Thanks for responding back!
How did you make the change? Did you use the Exchange 2003 ESM or 2007 Console? I think I tried 2003 first but then used Exchange 2007 to change the OAB generator. Its been a long time since I did this so I can't remember.
I did it on the 2003 side, although strictly speaking I guess you're supposed to move the role through 2007 ESM (right click on Default OAB, choose Move).
Maybe that's where I went wrong and had to go into the shell to fix things...
The command

Set-OfflineAddressBook "Default Offline Address List" -ApplyMandatoryProperties

appears to have fixed this issue for me as well. The greyed out boxes are now available and checked.

I will know in 24 hours if the clients are upadting.