I forgot to post a couple things. Here goes.
A user can send mail thru the exchange server to any other external
addresses. But if user A sends a mail to user B that are both on the same
server with a mailbox they never get it. If someone from the internet
sends to any user on the exchange server it never arrives. So in a
nutshell, no one on the server ever receives e-mail no matter where its
sent from. But users on the exchange server can send mail to any other
mail server and the recipient will recieve it.
I have tried to telnet to the exchange server, port 25 and sent mail that
way. Same result. If its to a user whos mailbox is on the exchange server
they never get it. But if I sent it out to someone on the internet they do
receive it.
There are no errors in the event log. 
I am wondering if there is a problem with exchanges information store?
This is my second attempt on this network, following a clean install of
the OS and exchange. Thought I screwed something up before. But this time
was by the book. Same results.
I feel like there is something I am missing or neglected to do on setup.

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