Question : How do I set up Exchange to foward to an internal SMTP server?

I have another server in the enterprise that has the simple IIS SMTP server installed on it (Server 2008 r2), and it can accept e-mails that I write by hand over telnet to port 25, so I know that it's working. Now I need our Exchange (2003) server to be able to send mails to it. I tried adding a contact in active directory with scc-scsm@scc-scsm (the name of the server with SMTP on it) as the SMTP address, but mails to it bounce back with:
You do not have permission to send to this recipient.  For assistance, contact your system administrator.
            <mailserver #5.7.1 smtp;550 5.7.1 Unable to relay for scc-scsm@scc-scsm>

The purpose of this is to allow people to submit helpdesk tickets via e-mail to this server (SMTP on the server just drops them in the drop folder as .eml files and the helpdesk software picks them up).

What do I need to change in Exchange to make it able to relay messages to this other SMTP server?

Answer : How do I set up Exchange to foward to an internal SMTP server?

Ah, ok, I understand.

I believe you have it mostly correct, you just need to setup SMTP on the IIS server "answer" to scsm.local.

Rather than re-type all of it, here is a link and a copy/paste

http://myitforum.com/cs2/blogs/scug/archive/2010/01/07/configure-scsm-email-incident-support.aspx

Setup & Configure the SCSM SMTP server

The SMTP server is a functionality on server 2008 (R2) and is configurable via the Internet Information Services (IIS) 6.0 Manager. (So don’t forget to tick this option also when installing the IIS role)

Setup of the SMTP server

    * On the computer that will host the SMTP Server service, on the Windows desktop, click Start, point to Programs, point to Administrative Tools, and then click Internet Information Services (IIS) 6.0 Manager.
    * Right-click the local computer node, select New, and then click SMTP Virtual Server.
    * In the New SMTP Virtual Server Wizard, in the Name field, type the name for the SMTP server, and then click Next. In this example, type helpdesk.demo.local.
    * On the Select IP Address page, click the drop-down list and select the IP address of the computer that is hosting the SMTP Server, and then click Next.
    * On the Select Home Directory page, click Browse and click to the folder for your home directory. For example, select C:\inetpub\mailroot. You will create a share for this folder in the next procedure.
    * On the Default Domain page, type the domain name for this virtual SMTP server, and then click Finish. The domain name you enter must match domain name that is configured on the Exchange server in previous procedure. In our example, type helpdesk.demo.local.

Create a share for the mail root folder

    * On the Windows desktop, right-click the Start button, and then click Explore.
    * In Windows Explorer, drill down to the folder that you specified as the home directory in step 5 from the previous procedure. For example, drill down to C:\inetpub\mailroot. If needed, create two sub folders, Badmail and Drop.
    * Right-click the home folder, and then click Share.
    * In the File Sharing dialog box, select the domain user that you specified for the Service Manager account, click Contributor, click Share, and then click Done.
    * You can double check this account in the SCSM console
          o In the Service Manager console, select Administration.
          o In the Administration pane, expand Administration, security, and then select “Run As Accounts”

     clip_image002

    * Make sure that the Simple Mail Transfer Protocol (SMTP) service is set to Automatic and has started

Good luck!