Correct, you are not having a relay issue. Notice how the relay dialog is actually a slightly different screen than the authentication tab (the options are similar). Relay is any destination domain. Authentication is any connection, even if the destination is local. Exchange 2007 does provide a little more granularity (the new permission you use to control this is ms-Exch-SMTP-Accept-Authoritative-Domain-Sender, see http://technet.microsoft.com/en-us/library/aa997170.aspx), but the fundamental SMTP problem is the same. In this day and age, you have to accept anonymous connections to receive Internet mail, which does lead you open to the possibility of spoofing. Part of the solution to the spoofing problem is SPF. There's also a really good earlier post on how you can configure border servers with two SMTP VS for 2003, one for internal submissions only, one for Internet submissions only: http://msexchangeteam.com/archive/2005/01/24/359677.aspx