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POP3 connectors and External recipients

Dealing with POP3 connectors can be cumbersome at times.

This is one such peculiar scenario where some of the POP3 users, instead of connecting to the Exchange server,  download their emails separately from the ISP using their own mail client.

The trouble is when an Exchange user tries to send emails to these external users. 

** Note that these users have no Active Directory accounts and most importantly no mailboxes in the SBS Domain.

If represented graphically, the scenario would appear very much similar to the one drawn below:

 

When User1 tries to send mails to User2, he/she receives and NDR:

Your message did not reach some or all of the intended recipients.
The e-mail account does not exist at the organization this message was sent to. Check the e-mail address, or contact the recipient directly to find out the correct address.
<FQDN of the SBS Server #5.1.1>

Based on the Exchange version running, the solution would differ:

For Exchange 2003 (SBS 2003):

E-mail to external recipients with the same e-mail domain causes NDR messages when using the POP3 Connector.

For Exchange 2007 (SBS 2008):

E-mail to external recipients with the same e-mail domain causes NDR messages when using the POP3 Connector on Microsoft Windows Small Business Server 2008.

For SBS 2011 installations running Exchange 2010, the settings are similar to those in Exchange 2007.