When a message is undeliverable, Exchange returns it to the sender with a NDR. You can also designate that copies of the NDR be sent to a location of your choice. If the NDR cannot be delivered to the sender, a copy of the message is put in the Badmail directory. Messages placed in the Badmail directory cannot be delivered or returned.
To set a storage location for NDRs:
Warning Do not select the M: drive (the drive running Exchange Information Store) as a location for your Badmail directory. Selecting this drive will conflict with Exchange's administration and transport services, causing messages to stop flowing.
Important You must install an SMTP connector and be sure the designated host is in the connector's address space. Otherwise, Exchange will not be able to find the host and no mail will be forwarded, generating non-delivery reports. This SMTP virtual server does not have to be the bridgehead server for the connector, provided it can reach the SMTP virtual server that is the bridgehead.For example, if an SMTP virtual server and a Unix e-mail server both serve a domain called airlines-10.com, Exchange may receive e-mail intended for Unix users. When Exchange can't find these users, it will know to forward these messages to the designated host in the other system.
Note Be sure outside e-mail is directed first to your Exchange organization, to ensure all Exchange e-mail is received and all other e-mail is properly forwarded.