I've seen lots of people asking how to restrict users from receiving and sending external email.
I must thank CJ (and Chris for the following though)
First of all give the users you want to restrict a non-valid email address like email@example.com
Leaving the X.400 address intact enables them to communicate with their co-workers internally since Exchange 5.5 uses X.400 behind the scenes.
Next add the users to the prohibiting them to send tab on the Internet Mail Connector.