Ok, Hope this one goes better!
You will need to switch your W2K domain to Native mode so that your Exchange
5.5 distribution lists can be properly converted into the correct type of
W2K groups. If any of your current DL's is used in conjunction with Public
Folders, your DL will be converted into a Distribution List first; the
Store.exe will convert this group type into a security group if needed. If
this group is of the 'universal' type (as happens when you use the ADC), you
must be in native mode because in mixed mode you cannot have universal
security groups.
But in any case, your upgrade will be done, if when your domain is in the
'wrong' mode.
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List Charter and FAQ at:
http://www.sunbelt-software.com/exchange_list_charter.htm
