I don't know of any problem with Exchange 2003 server so far. I guess you have an authentication problem. You have to set MaxBulk the same way as Entourage. Also MaxBulk sends to sender account only in Test mode. It also sends the delivery report to you as well.
I fixed the Test mode problem but I still can't send any mail. Watching delivery I can see that my user name and password are accepted and that my log in is okay. Then it says that it "can't relay" for the first address in my list, produces an error and goes on to try an authentication method that isn't going to work.
My relay settings are currently wide open trying to make this work. There are no relay restrictions on the Exchange end. Entourage with basic SMTP authentication continues to work just fine with the same user name and password.
My boss wants to send out around 200 invites today and told me I need to make this work within an hour or so or I have to give up and just use Entourage. Since there will be many more of these events I really don't want to.