I just went through a NSF to PST conversion, Domino 7 to Exchange 03, at a company for 25 people. The best (not easiest) way I found was the MS Outlook Connector for Domino.
What I did was get everyone's ID files, and open Lotus Notes first, import their ID file, log in as them, then tie the connector in. Then open up in Outlook (using the MS Connector) all their mail would appear. After I checked all the email, contacts and calendars were there, I exported all information to a PST file.
Then I'd go onto the users computer, setup there Exchange account in Outlook, and replace (or import) the PST with the one I had just exported, and it automatically populates the MS Exchange server with those messages. We tried the MS Server tools to export Notes to Exchange but the calendars would not export correctly at all. So yes, this is may not be the best way with as its time consuming as alot of time goes to exporting/importing. But without any additional cost to IT (were small business) we saved a bundle and it worked 100%.
Hope this helps anyone else out there.