Hi James:
Storage Exec uses Net send to send messages to the user, Net Send in turn is based on the messager service. The problem with the messager service is that it reports the first machine is sees on the network where the user is logged in and sends the msgs there... so sometimes the message functionality doesn't seem to work ... however the funcitionality is indeed working however the msg is not going to the machine that the user thinks that it should but it is infact going to the machine that the messager services sees that the user is logged on.
To use the exchange server for email, a profile needs to be setup on server where storage exec is installed. That profile username and password are entered in the global properties of Storage Exec.
If you want to use the smtp server for email just enter that info in the global properties. and use the test button to see if the functionality is working and that your email server is working.
Use AD for email option just extracts the user email from AD, who violates the quota. you need to put in the to field... however if you don't want to use the AD option you can simply put @yourcompany.com and that would work too.
_Shazam