Hi ksmithscs,
First of all you will not be able to use the "Microsoft Exchange" option on the iphone, including syncing of contacts, calendar and push email. This is because Active Sync support is only avaliable from Exchange 2003 SP2.
You can however set up IMAP email sync. Have a read of this guide that explains how to set it up..
http://windowsitpro.com/article/articleid/96730/getting-your-iphone-to-sync-with-exchange-2003.html
If you are going to start to support mobile users then I highly recommend that you get your self up to at least Exchange 2003 SP2, but ideally onto Exchange 2007.