Right, your provider will manage POP3. Here's what I would do:
- Create email box for user at provider, use a strong password for POP3 (https://www.grc.com/passwords.htm provides some pretty ridiculous ones for you to use, I generally use about 10-20 characters of the third option)
- you may want to record these passwords in a text file in a secure location on the server for troubleshooting later
- Create the user in Active Directory with an Exchange mailbox
- Configure the POP3 connector for that user to download email from the provider, using the strong ridiculous password generated above
- note the POP3 connector is only included with Small Business Server editions of Windows, not full Exchange editions
- i have no explanation why, its just the way Microsoft licensed it
I'm assuming your users already use POP3 with Outlook. You will want to import their PST file into their Exchange mailbox. Let us know if you need help with this.
Outbound email may also be a problem. You might have to configure Exchange to direct all outbound email to the provider's SMTP server. You do this so that your mail is sent and received by the same servers and helps with preventing your email being marked as spam (although this method has pros and cons as well). Some providers require you to enter a username and password in order to authenticate to their server as a relay. I am under the impression this is only available from Exchange 2007 / Small Business Server 2008. In order to do this with Exchange 2003 you have to jump through a couple hoops. Additionally, if you don't have a business account from your Internet Service Provider, they might be blocking all outbound email on port 25 that isn't being directed to their own mail servers (with authentication). If that is the case, you may need to upgrade to a business account. It wouldn't hurt to have a static IP address either - that way your users will be able to use the Outlook Web Access if you get this configured.