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!