Moving on from this i tried with a 2000 user and posted a new item clicked View From field and entered the name of a DG entered some text in the subject and posted the item which appears in the public folder from the DG and when you click on it it says the following:

Berm, Stephen; on behalf of; _SQL Administrators and if you try to reply it creates a new email message to _SQL Administrators instead of Stephen.

This doesn't work in 2007 could it be a secuirty enhancement or something to do with delegates?