Figure1:


Inorder to set the registry follow the below step:
1. Open Registry Editor.
2. Locate HKEY_LOCAL_MACHINE\System\CurrentControlSet\Services\RESvc\Parameters.
3. Right-click Parameters and select New | DWORD value. Name the new DWORD value SuppressStateChanges.
4. Double-click SuppressStateChanges.
5. In the Value data field, enter 1.
6. Close Registry Editor and then restart the Simple Mail Transfer Protocol (SMTP) service, the Microsoft Exchange Routing Engine service, and the Microsoft Exchange MTA Stacks services for the change to take effect.
Note: You have to do it on each exchange 2000\2003 server if you have more then one routing group connector.

Now I have done the above changes on my exchange 2003 server and let me see the output how it looks like:


Based on the above information I can go ahead with the installation of Exchange 2007, as of now it is just giving me information that AD schema need to be upgraded.

Now we are ready to install to exchange 2007 with co-existence exchange 2003. As you all know that we are ready with AD preparation requirement now what we need is server specific requirement

1) MMC should be 3.0 ( if we install windows 2003 sp2 you can avail this 3.0 or if you have sp1 then you need to download it from the internet link     
2) Dot.net 2.0 to be installed + hotfix KB926776-x86.exe ( For Dot.net 2.0-x86 & hotfix get from PSS 
3) Powershell – KB 926139 : If you don't have simply click on this link - How to Download Windows PowerShell 1.0

I have installed the above 3 requirements you can see it in this Figure3



Now I need to prepare my new Exchange 2007 server to be aware of exchange 2003 organization and schema should be updated

• Setup.com /PrepareLegacyExchangePermissions :
  •  For running the above domain user must be Exchange Full control and he should have enterprise & domain rights.
• The next command you need to run is for preparing the schema
  Setup.com /PrepareSchema
    The above command should run from the exchange server because it requires .netframework should be installed and GC should be contacted and rights he should possess is schema admin & enterprise admin.
• The third command you need to run to prepare the current domain so that it will add Exchange Universal Security Groups and configures the Exchange objects with AD. The command is
   Setup.com /PrepareAD
    Once you run this command you will find Exchange Universal Security Groups in the root domain which will have the following security universal groups
  – Exchange Organization Administrators
  – Exchange Recipient Administrator
  – Exchange View-only Administrators
  – Exchange Servers
  – ExchangeLegacy Interop
• The final step is optional one and  only required to run when you have multiple domains, but there are 3 ways to execute this command for making you existing domain to be awared of exchange 2007.
  • PrepareDomain:
    It is also possible to prepare a local domain or all domains in the Active Directory using the Setup.com /PrepareDomain and Setup.com /PrepareAllDomains, respectively.These switches will set permissions on the Domain container for the Exchange servers, Exchange Organization Administrators, Authenticated Users, and Exchange Mailbox Administrators; create the Microsoft Exchange System Objects container if it does not exist; set permissions on this container for the Exchange servers, Exchange Organization Administrators, and Authenticated Users; and in the current domain, create a new domain global group called Exchange Install Domain Servers. In addition, it will add the Exchange Install Domain Servers group to the Exchange Servers USG in the root domain.
    – Setup.com /PrepareDomain – It will prepares the current domain
    – Setup.com /PrepareDomain:FQDN of target domain to be prepared
    – Setup.com /PrepareAllDomains – Prepares all domains in the forest.

By default when you run setup.exe it will take care about the above keys but it is always recommended to run each keys separately.

Tips : In the Exchange DVD you will see two mode of extension 1) setup.exe and 2) Setup.com. Setup.exe is GUI mode and Setup.com is unattended installation. It is always recommended to run setup.com for running legacyexchangepermssion, schema and preparead command.

Now lets take close look on each and every keys i.e what happen when we run this command:
Setup.com /PrepareLegacyExchangePermissions
                    Welcome to Microsoft Exchange Server 2007 Unattended Setup
                    Preparing Exchange Setup
                    No server roles will be installed
                    Performing Microsoft Exchange Server Prerequisite Check
                    Organization Checks              ......................... COMPLETED
                    Configuring Microsoft Exchange Server
                    Updating legacy permissions      ......................... COMPLETED
                    The Microsoft Exchange Server setup operation completed successfully.

If you see the above  it has configured the new server installation with legacy exchange server. Reason for running this command is because I have legacy exchange server in my domain.

Setup.com /Prepareschema
                C:\Documents and Settings\Administrator.HAPPY\Desktop\E2K7>Setup.com /PrepareSchema
                Welcome to Microsoft Exchange Server 2007 Unattended Setup
                Preparing Exchange Setup
                No server roles will be installed
                Performing Microsoft Exchange Server Prerequisite Check
                Organization Checks              ......................... COMPLETED
                 The Active Directory schema will be upgraded if you continue. Verify that the organization is ready for Exchange 2007 by running the Exchange 2007 Readiness Check, which is part of the Exchange Best Practices Analyzer.

                Configuring Microsoft Exchange Server
                Extending Active Directory schema
               Progress                         ......................... COMPLETED

I guess everyone knows what does this command do.

Setup.com /PrepareAD
            C:\Documents and Settings\Administrator.HAPPY\Desktop\E2K7>Setup.com /PrepareAD
            Welcome to Microsoft Exchange Server 2007 Unattended Setup
            Preparing Exchange Setup
            No server roles will be installed
            Performing Microsoft Exchange Server Prerequisite Check
            Organization Checks              ......................... COMPLETED
            Configuring Microsoft Exchange Server
            Organization Preparation         ......................... COMPLETED
            The Microsoft Exchange Server setup operation completed successfully.

By running this PrepareAD it will create a new Administrative group in the Exchange Organization
Figure4


It will create Microsoft Exchange Security Group
Figure5


Tips : What exactly happen when you run setup.exe command
Background process
If you run setup.exe it will run the above commands automatically. The setup.exe will first identify whether you are meeting the basic requirement as far as AD requirement and server-specific requirement. Then it will check whether you Exchange 2000\2003 server is existing in the org or not, if it is existing it will check the prerequisites whether it is in native mode if so then it will prepare your exchange 2007 server to give support for legacy exchange servers. Then it will upgrade the Ad schema for exchange 2007, then it will prepare your AD by adding Exchange Universal Security Group and configuring the Exchange object with AD then finally it will make your ad domain with new exchange 2007 attributes.

Now my server is fully ad prepared & even I met sever specific requirement. Now I need to install exchange 2007 here, either I can go with unattended installation (setup.com) or typical or custom installation. I am choosing typical installation here.

Typical Installation:
When you run setup.exe it will ask for “Mail Flow Setting” This mailflow setting will create a routing connector for the mailflow between exchange 2000\2003 to 2007 and vice versa
Figure6:


Now the next screen will be readiness check to see that whether this server is ready for the installation of Exchange 2007.
Figure7


Then it will copy the exchange file and will install the server role to the new server.
Figure 8



I hope this article given you the basic about installation of exchange 2007 with co-existence of exchange 2003. Thank you for viewing this article.

Upcoming articles:
In the next article I will show you how to move the mailboxes, public folders, OAB and removal of last legacy Exchange 2003

Transition from Exchange 2003 to Exchange 2007 : Moving the Public Folders, Mailboxes & OAB Part-3
Transition from Exchange 2003 to Exchange 2007 : Removal of last legacy Exchange 2003 - Part4

Related Article:
Transition from Exchange 2003 to Exchange 2007 : Upgrading Exchange 2003 to Exchange 2007 Part-1

Reference:
Upgrading to Exchange 2007
Transitioning from Exchange 2000/2003 to Exchange Server 2007
Installing Exchange 2007