Ray, the SBS guru posted this to the newsgroup... but I'd highly recommend that you pay attention to his note at the bottom about calling PSS. Don't ever be TOO cheap. Yes, calling PSS is a US$245 call, but it is worth every penny. The support folks live and breathe SBS and know this box better than...
Disable NDR: From Exchange System Manager, Global Settings, Internet Message Format. Double click on your right. Advanced tab. Uncheck Allow non-delivery reports.