Exchange Auto-Reply not working

Exchange Enterprise 2003 server - Outlook 2003 clients. I have an employee trying to set up a vacation rule. I finally figured out how to use the Out of Office assistant to auto reply AND forward, but it only works for internal e-mails. When I send him an email from an external address - no reply...but the forward works. I am at a loss...any help much appreciated. Anythign I find at Microsoft web site not helpful.