Your permissions are all banged up.
See
http://support.microsoft.com/kb/938444Specifically
Additionally, if you move the mailbox from Exchange Server 2003 to Exchange Server 2007, you receive the following error message:
-1056749241
This issue occurs after you successfully install Exchange Server 2007 with the following roles:" Hub Transport
" Client Access Server
" Mailbox
Additionally, you can successfully create new mailboxes in Exchange Server 2007.
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CAUSE
This issue occurs if Read permissions were removed for the Authenticated Users group in an organizational unit.
When this occurs, Exchange Server 2003 continues to authenticate clients. However, in Exchange Server 2007, the Exchange Servers group is a member of the Authenticated Users group, and this group is missing the Read permissions for address lists. Exchange Server 2007 uses the ShowInAddressBook attribute to authenticate clients.
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RESOLUTION
To resolve this issue, grant Read permissions to the Authenticated Users group in the organizational unit where the user account is located.
Note In special hosting environments, you may not be able or willing to grant authenticated users Read permissions. In this scenario, you can grant Read permissions to the Exchange Servers group in the organizational unit.