In my newly installed exchange2007 site I also had an exchange2003 server that handles all the incoming/outgoing mail apart from the test user that I had moved to the 2007 server. Unfortunately I could not send mail to the 2007 user but I could receive mail from this user. T here was a lot of postings on the internet and various forums for solutions for a similar problem but normally in the opposite direction.
After a post at petri (2nd posting down) I deleted my smarthost setting on the virtual server on the 2003 machine and mail started flowing. Now I can progress in my mail migration. Many thanks to Andy at Petri for the answer on this one.
Annoyingly this did come up in the best practise analyzer, but only as a warning. As the smarthost had been working I left it alone – I really should have known better.