There are actually 2 different types of delayed message delivery... I believe stemming form the quaintness of X400. The following applies to Exchange2000/Exchange2003.
They have somewhat different behaviors, but both result in getting the message delivered to the intended recipients at some time after the specified time.
The first type is delayed send. This is the typical functionality you see when using Outlook to send email. This functionality is controlled by the MAPI property PR_DEFERRED_SEND_TIME. When this property is set, the the message is kept in the MSExchangeIS SendQ.
To end users, this means that their messages are visible in their Outbox. They can still double-click on them to open them, and will need to click "Send" for them to resubmitted for delivery.
For an administrator, they will need to log into the users mailbox to see the message in that users Outbox. Unless the mailbox is deleted and purged
The second type is deferred delivery (controlled by the MAPI property PR_DEFERRED_DELIVERY_TIME). The key difference is that the delay happens on the "delivery" side once transport "owns" the message. While the phrase "deferred delivery" might make you think that message is held on the destination server, it is in fact held in the queues on the source server.
From the end-users perspective, the message immediately disappears from their mailbox and they cannot modify it if something occurs to them later. This is somewhat moot, as the past several versions of Outlook do not use this feature.
For the email administrator, the message is queued up in the MDB temp tables along with all of the other mail. In Exchange2003, these messages are also exposed through the queues node of the Exchange System Manager. Deleting and purging the mailbox have no effect on these messages, but deleting the MDB they are queued on will make the messages disappear.