For all the people having the single labeled dns issue it looks like we are currently stuck without a solution.
http://forums.microsoft.com/TechNet/ShowPost.aspx?PostID=2522637&SiteID=17&mode=1
Someone on the TechNet forms contacted product support and they were told Exchange is not supported on single-labeled DNS domains. The RTM installer didn't block on install but apparently it should have.
The worst part about this is the lack of documentation and the fact that there is no real solution. I can't find ANYTHING that says exchange won't work on single-labeled DNS domains. And since that requirement apparently has changed between RTM and SP1, or at least the enforcement of that requirement, there needs to be a way to solve the problem for the people on RTM with single labeled domains.
You can't rename a domain with Exchange 2007 so it seams like the only solution is to create a new domain, setup a new exchange server, then migrate all the accounts and mailboxes. That doesn't seam like much of a solution at all to me..