IIS 7 Http Redirect Issues

I have IIS 7 installed on my Server 2008 machine. My internal domain name and external website have the same name. Lets say my domain is called "domain1.com"

In my DNS Manager, i have an "A" record set for www to go to "www.domain1.com" which is our external website. This works just fine but requires internal users to type www to get to the website instead of just the domain name. In some of the browsers, the www portion is removed automatically so the user then see the IIS 7 page instead of our website.

I setup a HTTP Redirect in IIS with the following settings. I check the box to "redirect requests to this destination" and type in "http://www.domain1.com"

I also check the box that says "Redirect all requess to exact destination (instead of relative to destination)

Finally i change the status code to "Permanent (301)"

I apply all the settings and when i go to my browser and type "domain1.com" after a few seconds i get an "Internet Explorer cannot display the webpage" message. The address in the address bar changes to http://localhost

As a test, i setup the redirect to go to "http://www.google.com" with the same settings and went to my browser and typed "domain1.com" and the page was redirected to google.

What am i missing and what do i need to do so when someone internally types "domain1.com" in their browser it will take them to our externally hosted website.

Thanks,