Hi Alan,
I suggest that you disable fallback mode so that the Outlook 2007 semantics are preserved between the Steelheads and more importantly for you, you get your "rooms" functionality back.
Steelhead appliances will continue to optimize by performing data reduction and TCP-level optimization. What will be missing is the ability to accelerate at layer-7. For chatty Exchange operations such as sending an email, which is impacted by high latency, the MAPI 2K7-based round trips over the WAN will still have to be performed even though the data has been seen before.
I also want to remind you that in order to get data reduction you need to make sure you disable encryption on the Outlook 2007 client.
Regards,
Bob