First off, setup your network to enable RPC over HTTP, and confirm it works with Outlook 2k3.

Keep in mind you WILL need a valid SSL cert from a trusted authority.  I recommend a cheap cert from godaddy, as they can be had for between 13-30 bucks if you catch a sale.

Once you have your cert, follow the instructions here:

http://www.petri.co.il/how-can-i-configure-rpc-over-https-on-exchange-2003-single-server-scenario.htm

And make sure you test your exchange connectivity, and make sure RPC over HTTP is working for a standard Outlook 2k3 install.

Once you’ve followed those steps, test your configuration here:

https://www.testexchangeconnectivity.com/

All green? Gooooood.

Now, this is where it gets weird. In your Outlook 2k7/Vista machine, go to control panel-mail, and setup your new profile. 

For your Exchange server, enter the INTERNAL FQDN of your mail server, ie servername.domain.local, selected cached mode so you can get decent performance out of your setup, and enter your username.

Select more settings, go to Security, and set it to Kerberos for now. (We’ll come back to this.)

Go to the Connection tab, and under Outlook Anywhere put a check in “connect to Microsoft Exchange using HTTP”, and then click the Exchange Proxy Settings button

Under connection seetings, enter the URL for your OWA server, and put a check Connect using SSL only.  Also check both “On fast networks”… and “On slow networks…”  Set your Proxy Authentication settings to Basic authentication.

Click OK, and then OK again, at which point you should get a pop up warning about using Kerberos from outside a firewall.  Hit ok and continue.  Go ahead an open outlook, enter your username as Domain.local\username  and password, and outlook should probably fail.  At this point go back to your exchange settings, and change you Logon security back to NTLM instead of Kerberos.  Reopen Outlook, and you should now connect.

Stupid and crazy compared to every other version of Outlook\Entourage, but there you go, it worked for me

Step 1: Install the Outlook Address Book service

http://support.microsoft.com/kb/287563/

To do this, follow these steps, as appropriate for the version of Outlook that you are running.
Microsoft Outlook 2002 and Microsoft Office Outlook 2003

1.    On the Tools menu, click E-mail Accounts.
2.    Click to select View or change existing directories or address books, and then click Next.
3.    If your Outlook Address Book is listed, click Cancel, and then go to the steps in the “How to Mark Your Contact Folder for Use with Your Address Book” section.
4.    If your Outlook Address Book is not listed, click Add.
5.    Click to select Additional Address Books, and then click Next.
6.    Click to select Outlook Address Book, and then click Next.
7.    Click OK when you receive the prompt that the address book you added will not start until you click Exit from the File menu.
8.    Click Finish.
9.    Click Exit from the File menu, and then restart Outlook.

My google-fu is strong.