What the actual bug is in the iPhone 2.0 ActiveSync implementation

There is a serious bug in the ActiveSync client implementation in the iPhone 2.0 software. I'm pretty aware of this as I'm a Sr. Engineering type for another major cellular handset OEM and went through the same issues debugging/QAing development of another client on another handset. Note that I haven't gotten around to picking up a 3G iPhone yet, but updated my existing EDGE 1.0 handset in a 6 hour to the minute iPocalyptic ordeal.
First of all there are some pre-existing conditions in your MS-Exchange server set up that might negate your ability to access Exchange mail with any client, first, OWA services have to be "turned on". If you cannot access Outlook Web Access from the browser on your desktop/laptop, you're SOL, it'll never work. If your Exchange server is behind a corporate firewall, i.e., you have to be on your home network or VPN in to access OWA services, you would be again SOL on using the iPhone.
The implementation bugs would indicate that whomever was in charge of testing it did not have a clue about what they are doing, and/or did not test the client on a wide enough variety of MS-Exchange installations.
A very common setup, like my corporate Exchange servers, involve multiple servers with unmatched security certs, i.e., OWA address is https:/webmail.corpname.com, but actual server name is https://mail.corpname.com, requiring response to a security cert Accept/Deny/View certificate type message that will popup when accessing via a web browser or a PROPERLY implemented ActiveSync client. When you attempt to access a setup like this, which is not uncommon, the response back to the proffered credentials is unexpected, and in the case of iPhone 2.0 you just get an immediate "Exchange acct. verification failed" error message in very fine print at the top of the display (which apparently from the verbiage in a number of posts some people aren't noticing) instead of the security cert popup. This issue should be easily fixable, but will require a software update to the existing 2.0 software ActiveSync client. There are potentially other issues with forms based authentication, but due to the cert issue I can't tell at this point if they exist as well.
The above is referenced specifically to an MS Exchange 2003 server, can apply to some older Exchange versions as well. I don't want to even get into MS-Exchange Server 2007; I can't connect to that either, but there can be a lot of issues further then the multiple server or security cert issue; since there hasn't been an SP2 release for it, it is still technically beta software IMHO. There ARE additional issues, especially if "CAPTCHA" validation is invoked, don't want to even go there...
The general implementation of the MS-Exchange looks distinctly "last gen" and flawed. The first attempt to attempt to garner setup/authentication using only reply address and domain/username input will probably not work on most MS-Exchange installations, and has to fail before you get prompted to input the server URL address. Another potential issue is that there is NO SSL On/Off control even on the extended setup page; and you do not see that the setting is defaulted to SSL "On" until after the entire setup fails and you go back through Settings - Mail - Acct details; SSL "On' is the default setting from Microsoft when setting ActiveSync on WinMobile devices, but as often as not should be set to "Off" for many MS-Exchange server installations/setups.
So hopefully 2.0.1 will be released shortly and we will all be able to get ActiveSync connectivity back to our MS-Exchange servers.... I'm not going to bother to pick up an iPhone 3G until this is rectified, what would be the point?
Note to Steve Jobs: If you didn't have an aneurysm/heart attack in the WarRoom today I would be available to ensure embarrassing f*ckups like this don't happen on future launches, and if you move me to the Bay Area will work for short money despite the fact I have 22 years experience in computers/telecommunications 8 1/2 of which bring successful cellular handsets to market, I just need to be two steps above a cardboard box on the corner of 9th and Howard, have your people all/email mine...

After almost 1 week of sheer frustrations, I have been unable to connect my Iphone 3G to my exchange server at work.
I have tried probably every method discussed here, including restoring my iphone 3G several times. My issue has been elevated all the way up to apple engineering, and still no solution.
It appears that the issue is that I cannot connect because my company is using Exchange server 2003 with SP1.
I can connect any Windows Smartphone or Pocket PC and it will sync in what seems seconds….very fast. I have used windows phones connected to our server for more than 4 years, never an issue.
My company has the attitude of we “We don’t want you to connect, you are lucky to be able to use active sync on windows phones!!” So their change is not probable.
Has anyone found a way to connect Iphone 3G to an Exchange Server 2003, SP1?

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