I'm fairly new to Exchange 2007 so please educate me on this subject. Why is it important to not have a policy where the primary SMTP address is the same as the computer name? We have a postfix system at our organization with such a configuration and it seems logical to me.My Exchange box is running as a hosted environment and it seemed to make sense that the default (original) domain use the same SMTP address as the name of the server.I suppose I could remove a character from this default policy, but should I be aware of any damage this might cause?

Ente, As far as I know, it is NOT a requirement that there be a POLICY that the primary SMTP address is the same as the server name. However, each server needs an SMTP address since Exchange uses this to send public folder replication messages between servers. Is this something that your hosting provider is telling you? Could you give us an excample of what they are telling you (you can change the domain name.)

Well I am the hosting provider actually. We have an SPLA agreement with a third party for licensing and segment the AD permissions using ADSIedit for each of our business clients.I think it will help for me to just copy what the error is when I last attempted the SP1 install: Organization PrerequisitesFailedError:The fully qualified domain name (FQDN) of the local computer matches the SMTP address of recipient policy 'Default Policy'. Setup cannot continue.Recommended Action: http://go.microsoft.com/fwlink/?linkid=30939&l=en&v=ExBPA.3&id=e21fee98-5929-4ef4-9e64-17c92c25222fThoughts?