I just noticed something new, I went to AD Sites and Services on my Mail Server and tried to replicate manually and I get an error: The RPC Server is unavailable. I guess this would be a DNS issue.

Okya. RPC not being available is very annoying. Check your MS Networking infrastructure - I suspect you are having severe trouble with your GCs. Do you have trouble sending mail between two users in the same storage group?

Anyone know a some basics about backup and sucessful restoration from exchange 5.5 , or the upgrading from 5.5 to 2000 ?

Maybe...