This article is from a FAQ concerning SCO operating systems. While some of the information may be applicable to any OS, or any Unix or Linux OS, it may be specific to SCO Xenix, Open There is lots of Linux, Mac OS X and general Unix info elsewhere on this site: Search this site is the best way to find anything.
This is an ancient post with little relevance to modern systems. The problem described here occured because mail did hop from machine to machine (uucp modems) many more times than it is likely to now, and it was not unusual to be confused as to the right path to take.
This might cause a loop somewhere- in the simplest case, the machine you sent mail to thought the sending machine was where it should send to, so the message ping-ponged between them. Fortunately the machines keep track of each time the message is forwarded (the hop count), so it won't go on forever, and when it reached the maximum, that's when you would get this message.
It's possible for this to happen today, but it would require badly misconfigured mail servers, so is only likely in a case where a larger business has set up multiple mail servers to serve various branches, and of course that would be quickly noticed and fixed.
By the way, I do sell and support Kerio Connect Mailserver and am happy to discuss any email issues you may have.
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Securing a computer system has traditionally been a battle of wits: the penetrator tries to find the holes, and the designer tries to close them. (Gosser)