I ran into a slight problem setting up a Domain Users iPhone to our Exchange 2007 Server. The client on the iPhone couldn't connect to the server. I thought it was a connection issue but it turns out since I migrated that server from Exchange 2003 to 2007 some of the permissions did not come over.
Make sure that you change the permissions for that Users Account to give the Account Rights to it self. Go into Active Directory Users and Groups, select the user having the issue right click on the account and go to Properties. Click into the Security Tab then click Advance. Add the user with read permissions to there account.