I am running GW7 sp1 beta. Thus, I didnt want to call BB as I thought they
would tell me I need the full SP1 before contacting them.

Without wasting too much of your time (because it is the beta sp1), any
obvious things I can look at? When I try to create a user, the BES server
cannot locate any of them from teh Groupwise address book. I am assuming
that is where it is looking.

I have gw 6.5.7 (FTF) on a W2K box. The Groupwise client can login and
access the addresses just fine.