If you inherited an already configured server which is running Exchange Server 2003: where would you locate the settings on the server that you would need to configure Exchange on iPhone 2.0?
There is a nice video podcast which explains in detail what steps you have to follow on your server and the iPhone in order to allow Exchange access.
The iPhone is out and it now has a place in the corporate world. In this episode we discuss the Exchange ActiveSync features such as the new autodiscover, remote wipe and enforceable security policies and then take you step by step through the configuration of Exchange 2007, DNS and the iPhone itself. Oh yeah and this feature is provided out of the box, no BlackBerry licenses required!
Then, read Apple's PDF document which also explains the details on how to configure your Exchange server for the iPhone:
iPhone 2.0 software communicates directly with your Microsoft Exchange Server via Microsoft Exchange ActiveSync, giving users push email, contacts, and calendar. Exchange ActiveSync maintains a connection between Exchange Server and iPhone so when a new email message or meeting invitation arrives, iPhone is instantly updated.
If your company currently supports Exchange ActiveSync on Exchange Server 2003 or 2007, you already have the necessary services in place to support iPhone 2.0 software—no additional configuration is required. If you have Exchange Server but your company is new to Exchange ActiveSync, review the following steps to enable Exchange ActiveSync.
Exchange ActiveSync is on by default in Exchange 2003 and later, although there may be things that you need to set up to get EAS access through your firewall.
You would need to be running Exchange ActiveSync somewhere to allow the iPhone to connect to exchange, much in the same way that the RIM software integrates with Blackberry. Installing the Client Access server role on your exchange server effectively enables ActiveSync.
You can read more about it on Microsoft's site.
Once that is up and running, David's answer is effectively correct. You point the device at the server, and use a username and password which exists, and has a mailbox on, your domain.
This will allow the iPhone to sync email, calendars, contacts, etc.
A walkthrough of the iPhone side of things can be found here.