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When sending a Microsoft CRM e-mail to a recipient who has a contact record in Active Directory (also seen in the Global Address List), you receive an error message that states:
The message 'Message Subject' failed to deliver to all servers.
The application event log records these error messages along with Literal Soap Faults. The message is sent to the end user, but when the end user replies to the e-mail, the application event log records another error and the message will not come into Microsoft CRM as an activity.
Microsoft Business Solutions CRM has a fix for this problem that is part of a cumulative update. The cumulative update information is described in the following Microsoft Knowledge Base article: 840934 Microsoft Business Solutions CRM version 1.2 update for 839153, 839159, and 839162