Exchange 2007 and 2010 Coexistence and Authoritative Accepted Domains

I have a customer that is upgrading from Exchange 2007 to Exchange 2010.  They put in a new server and are slowly migrating the account from one server to the other.  They are having a problem with messages not being delivered in the Exchange 2007 and having a "loop error" in the queue.

I checked their Accepted Domains and they have the Exchange 2007 connector as an Internal Relay and the Exchange 2010 connector as the Authoritative Domain.  All mailboxes for this company are hosted in the Exchange System.  THey do not have external mailboxes hosted anywhere else.

It is my understanding that both servers should be configured as Authoritative and that any messages between Exchange 2007 and Exchange 2010 will be routed by Exchange as its regular and normal way of operating.  They were assisted by Microsoft Consulting when doing the migration and allegedly Microsoft told them that this is the correct way of doing it and that the 2010 should be the Authoritative server.

I insist that this "version" is not correct but then again I am contradicting Microsoft's own people.  The customer is willing to try it, but I want to make sure that I am not missing something before going on with this.

Thanks,

Mario