SMTP Relay issues - not displaying Display Name in Outlook.

I have a 2007 CAS/HT server and a 2007 Mailbox server that I am in the process of migrating a 2003/2000 environment over to. Most things have gone really well, but am having an issue with the smtp relay on the CAS server. Basically, I have allowed systems to send relay mail for notifications, workflows, etc. The issue is that when a message is received in Outlook from these systems, it only shows the smtp address that it was sent from and doesn't correlate it with the AD display name like my 2003 front-end did. For example, there is a mailbox/user named Payroll System. In 03, a user would have seen the message coming from "Payroll System" even though the sender address was prylsys@domain.com. After redirecting mail.domain.com internally for these systems, the users now see mail from pyrlsys@domain.com and not the AD display name.
The default receive connector Default\Servername has been given anonymous rights to relay internally/externally. (I know....not best practice).

I am not seeing any events in the logs and have enabled verbose protocol logging.

If anyone has run into this I would appreciate some enlightenment and or/guidance.

Thanks!
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hiker_42Asked:
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Pat PribelSenior - Systems EngineerCommented:
Hiker 42... I believe your issue is related to authentication/permissions settings on the receive connector. Take a good look at this article. Basically you are most likely going to need to setup a new receive connector with the "Externallyauthoritative" authentication and the "exchange servers" permissions group. We had to do the same exact thing and once I setup a new connector with these specfic settings we were all set.  Make sure you understand what "externallyauthoritative" means and restrict as much as possible who/what can use this connector.
http://technet.microsoft.com/en-us/library/aa996395.aspx
From this article
"The ExternalAuthoritative authentication method requires the ExchangeServers permission group. This combination of authentication method and security group permits the resolution of anonymous sender e-mail addresses for messages that are received through this connector. This replaces the Resolve anonymous senders function in Exchange Server 2003."
Thanks
Pat
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hiker_42Author Commented:
Thanks! I will take a look and let you know.
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hiker_42Author Commented:
Thanks for the tip!
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