Exchange Pop3 connector malfunction

I've just deploed a 2003SBS server and am in a situation where I'm forced to use the pop3 connector for exchange because the customer does not want to get rid of their @verizon.net email addresses.  I setup my first mailbox and upon the first retrieval of mail, it failed.  I set the logging level to high and got a 1070:
 
An attempt to relay e-mail to recipient <SMTPAddress> was made. The e-mail could not be delivered because the recipient's e-mail domain name does not match any local e-mail domains.

I have followed the microsoft article and ensured that @verizon.net is both in the recipient policy, and the user also has their username@verizon.net as an exchange email address as specified in AD.  Still no go.  I've applied SP2 to exchange, deleted and recreated user accounts, email addresses and disabled/re-enabled the pop3 connector service.  I cannot figure out any way to repair the pop3 connector.  Any thoughts?

If the general response is "pop3 connector is worthless, dont try to fix it", then I will happliy accept an answer from anyone who can tell me how to specify a permanent sending account from within Outlook 2003.  So, say i dont use the pop3 connector, and I have two accounts setup in each outlook client (one for exchange, the other for their verizon pop).  How do i tell outlook to ALWAYS deliver mail using the exchange account.  As we all know, if a user hits "reply" to a mail that has come in on the pop account, it will attempt to send on the pop account and we'll get NDR's if the recpients are a mixed group of internal and external users (because verizon does not know how to route mail to suzie@mybusiness.lan).  It's too much to ask the user to check the "account" box for every email they want to send out.

Any solutions?