There have been many questions recently about the iPhone and it's ability to sync with an Exchange server. The answer to whether it can is yes, with caveats. If you are used to syncing a mobile device with ActiveSync, BlackBerry, or Good Mobile Messaging, you may find yourself surprised by the limitations of wireless syncing with an iPhone. An iPhone, at least as of its first release, will only sync with an Exchange Server as an IMAP client, and then, only if the Exchange Server allows IMAP connections.
With ActiveSync, your device will wirelessly sync email, calendar, contacts, and tasks. With the IMAP connection available on your iPhone, you can wirelessly sync your inbox. That's it. And, don't let the listing on your iPhone for an "Exchange" account throw you off... it's just doing an IMAP connection to the Exchange Server.
Here's hoping that the iPhone will one day support ActiveSync, or something similar, for our Exchange customers!
For detailed information about IMAP and ActiveSync, please see this excellent article : http://msexchangeteam.com/archive/2007/07/10/446015.aspx.