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1) Never had much luck with Smart Upgrade - Most of our users don't have W/S Admin right on their PCs, so they can't run setup.
Plus, most users aren't that savvy.
We're manually upgrading each one.
2) You said you sere setting up the new server in the same domain. So, you don't need to move them to a 'new domain', only to the new server.
Use the Adminp process to move the users. Start in the Admin client, People & Groups tab, then on the right hand side under 'Tools' choose 'People -> Move to Another Server'.
This is an automated process which reduces your workload quite a bit. It can be done manually, but no reason to.
Search Admin help for 'Move mail file' - the process is outlined there.
If you're setting up the new server in a new domain, you need to start by cross-certifying the domains. Then at some point you'll need to re-certify all users.
A lot more complex, but can be done. (That's actually what we're doing - we're combining multiple existing domains, upgrading servers, upgrading clients).
Feedback response number WEBB8GXLU4 created by ~Sigmund Dworelitnivu on 05/17/2011
New Domain or existing domain?
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. . . . . . New Domain or existing domain? (~Sigmund Dworel... 17.May.11) 
