Former Employee Email - Exchange

[nextdrewsaid () gmail com]

The situation I have on my hands is something that I am sure many of you deal with on a somewhat regular basis; 
however, I am sure in each case it is handled differently.

When an employee leaves the company, how do you handle their email? Initially, in our case, an auto response is put up 
stating that the user is no longer with the company, and that you should contact “this person” for assistance etc…

Several times we have created a PST of the former employees email, and then import that PST into the persons email box 
who has replaced them or we have passed it off to their former manager, of course we place it in a separate folder so 
as not mingle with their own email. 

So how do you handle old email, specifically containers in an Exchange 2003 environment?

I would be interested in all thoughts, from security, regulatory and logistical point of view.