Stevemen,
I feel your pain. Was in the same boat a couple years ago. (Still running a NT 4.0 domain controller FWIW)
As I remember when I added a new exchange from years ago, there is (was) quite a bit of documentation out there for the process through google searches. You'll probably have to go a few more pages deep in the results now but the info is out there.
Basically it's a matter of building and new exchange box, loading Exchange, and then moving the mailboxes over to it. Then you can safely remove the old exchange box from the network. Potential problems (if I remember correctly) are with public folders so be sure to read up on the process of moving those. Also, depending on whether you are using the same domain or creating a new domain there are some issues there. My advice, search and read a bunch, then make sure to have a complete backup (I'd clone the drive if possible) in case anything goes wrong.
If you're really stuck with no funding (like I was) I'd suggest looking into the Zimbra mail system. I've been running the Open Source (free) version of it for about 2 1/2 years now and it's been really good.
On the plus side, it's got a web interface second to none. Full drag and drop support when moving emails between folders, etc. There is also a desktop application though I only tested it for a short time due to the web interface being so good. Has full calendar and meeting features, address books (global and personal), and just about anything else that Outlook/Exchange has. Everything "just works".
On the down side, you'd have to build a *nix machine for it, not a big deal though, any recent box with raid 1 would do, and the biggest complaint I've gotten is that you can't email directly out of Word and Excel. Also people like to click the attachments to open them which opens them in a browser "helper" window which confuses some people. The solution is to have them save attachments before editing them.
When the big boss has a complaint (very rare) I just remind him that he can certainly have Outlook back.... just give me about 50k so I can upgrade everything that needs to be upgraded to run the newest version of Exchange.
BTW... the paid version of Zimbra also gets you Blackberry support as well as an Outlook connector. From what I've heard, people connecting to Zimbra through Outlook can't tell they are not connecting to an exchange server.
Of course it supports both POP and IMAP so one can access it with any email client anyway. I use POP on my phone with no problems.
When we made the change I had about 150 exchange boxes. I exported them from Exchange (.pst files) and then used a Zimbra-supplied tool to import them into Zimbra. All the folders and stored emails came across without a scratch. And a couple people had ~2GB mailboxes.
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