This past week I went through the procedure to prepare AD for Exchange 2010. I ran step 1 to /PrepareLegacyExchangePermissions. One thing I noticed today is when I create a new Contact in AD and I "Create an Exchange e-mail address" and give it a new SMTP address it doesn't seem to take. We are still on Exchange 2003. Has anyone heard of this issue after preparing AD? Update - As it turned out one of the domains didn't quite get the correct new permissions so Microsoft had me run dsacles manually. That fixed the problem.