Local domain email configuration for two SharePoint 2007 email enabled document libraries

I have a virtual SharePoint 2007 environment, comprising of a domain controller, SQL server and application server (3 VM instances). The domain name is contoso.local. I need to email-enable two SharePoint document libraries and thereby created two separate domain user accounts - userA and userB. My understanding is that if I need to send and receive email within this environment via SharePoint, I must set up SMTP service on the SharePoint installed server whose hostname is MOSS2007. So I installed the SMTP Windows component and set up a default virtual SMTP server. After doing these, I see moss2007.contoso.local and contoso.local under domains. The drop directory of the former is C:\Inetpub\mailroot\Drop.

When I started Outlook Express the first time on the SharePoint server, it prompted me to set up a user. I set one up for userA and specified an email address of usera@moss2007.contoso.local. This ended up creating a folder at c:\Inetpub\mailroot\Mailbox\contoso.local\P3_UserA.mbx. When some SharePoint event receiver code sends an email to UserA@moss2007.contoso.local, the mail file appears in this folder, instead of C:\Inetpub\mailroot\Drop. My Outlook client is able to read this message, but the SharePoint email enabled document library is unable to receive and add this email to the document library, because it must be monitoring only the drop folder.

How do I set this up correctly, so the SharePoint email enabled document libraries corresponding to UserA and UserB correctly monitor and receive the correct emails respectively?

In the POP3 configuration of the IIS POP3 service you can define a folder where the folder structure will be created under.

For each user there will be also created a subdirectory named username.mbx. Like

c:\inetpub\mailroot\mailbox\domain\username.mbx...

But SharePoint will only look into the rootfolder like c:\inetpub\mailroot\.

You need to delete those mailboxes to get it work. See also this MSDN post Incoming email problem: mail in Drop and mailbox folder but not in list on this issue.