Well I don't think our internal e-mail (employee to employee) is routed via the Internet or the whole firm (many offices across the country) would be dependant on the Internet link.
I think that if your name is in the Exchange/Outlook address book it routes it over the internal WAN, if your name isn't in the address book it routes it to the Internet.
I think the ‘Use this option to decide how to respond to requests for read receipts. Only applies to Internet Mail accounts’ in Outlook 2003 may be designed to stop you inadvertently returning a receipt to spammers , thereby confirming that your mail address is valid.
I'll do some testing at work that's the only way to be sure that these ideas work, thanks for all your help folks.