I tried installing Exchange Server 2007 into an existing Exchange 2000 organization today and was continually prompted to create a new organization, even after updating the schema and switching the organization to native mode. After a little troubleshooting and reviewing the log files I found that setup could not find a suitable GC. The AD domain already has a working GC, but apparently the Windows version was too old to be considered "suitable". Making the new Exchange server - which also happens to be a Windows Server 2003 DC - a global catalog server solved the problem.
Hope that info saves someone else a little time...
UPDATE: Here's a Microsoft article describing how to do make a GC for those that need it: http://support.microsoft.com/kb/313994
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