Outlook clients having issue sending to certain email address

We are migrating emails via a pst file from an outside email system (which they were using pop) to now get their email via exch 2010. Whenever the users tries to send an email to a certain address, which this adddress is setup in exch as an accepted domain, they are getting the following error:

The e-mail address you entered couldn't be found. Please check the recipient's e-mail address and try to resend the message. If the problem continues, please contact your helpdesk
Am I missing something on the exch server setup?.
I can send to the same email address from my own email and it works just fine but does not from the clients email.
Any ideas here would be apprecitated.
Who is Participating?
ScriptAddictConnect With a Mentor Commented:
Just that every user has an autocomplete in their outlook client.  for 2010 it's cleared here:

Auto-Complete clear on my Outlook 2010 client
Did you have them wipe their autocomplete?  
I know when I moved servers on two different 2010 exchange servers, autocomplete stopped working.  

Does it still have problems if they don't use autocomplete to send the email?  (select it manually from GAB)
vmichAuthor Commented:
What do you mean by wipe their autocomplete?
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vmichAuthor Commented:
I get the error even if I logon to owa locally on the server as a test account when sending to the email address.
can you enter full email address and try to send mail
vmichAuthor Commented:
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