Migrated from Exhcnage 2003 to exchange 2007 - public folder has email address that receives mail but clients cannot send

I'm really unfamiliar with exchange so I'm not sure how to approach this question.  I migrated from a 2003 exchange server to a 2007 exchange server. I have reviewed the 2003 server setup but  cannot figure it out how it was working.  

We had a public folder that was setup to receive mail, and all the tech's in our tech support department could see the email in the public folder, and they had an account setup in their outlok where they could respond only back using a generic account name, like tech@domain.com, and so they wouldn't have to reveal their normal email address. I thought everything migrated over fine until one of my support reps said that any email they tried to send with the generic tech acccount was just sitting in their out box.  So I took a look at the error message they were receiving.  

It says Task 'EmailName - Sending' reported error (0x800CCC78) : 'Cannot send the message. Verify the e-mail address in your account properties.  The server responded:530 5.7.1 Client was not authenticated.'

I looked at the settings for that account and it as setup as a POP3 account with the incoming mail server as localhost and the outgoing mail server as the ip address of the mail server.  So it looks like we were relaying mail through our server.  There was NO password setup on the account.  Now this used to work, so I'm wondering if something has changed now with exchange 2007 that this is prohibited?