outlook out of office does not work exchange 2003

I had this issue for a while and decided to sort it out. After googling I found it was a setting on the exchange:

To turn on out-of-office replies to the Internet, follow these steps:
  1. On the Exchange server, start Exchange System Manager.
  2. Double-click Global Settings, and then click Internet Message Formats.
  3. In the Details pane, right-click a particular domain name, and then click Properties. The default SMTP domain is "*".
  4. In the Properties dialog box, click the Advanced tab, and then click to select the Allow out of office responses check box, and then restart the SMTP and Routing Engine services.

    Note After you do this, the e-mail messages that are sent from users in the Internet domain that were configured in step 3 receive an Out of Office response from the users in the Exchange organization that have enabled Out of Office on their mailboxes.
  5. Stop the Simple Mail Transfer Protocol (SMTP) and Microsoft Exchange Routing Engine services, and then restart them.
From http://support.microsoft.com/kb/323665