To disable NDRs, follow these steps:
Launch the Exchange Management Console
Expand the Organization Configuration folder
Click on Hub Transport
Select Remote Domains (Key point)
Right-click Default (Tab)
Click on the Message Format (Tab)
To turn off NDR, remove the tick on Allow non-delivery reports.
Basically what you should do is to enable the Recipient Filtering functionality to block emails addressed to invalid recipients.
In this manner emails will be rejected immediately without generating an NDR.
You can only do this if Exchange is receiving internet email directly.
If you have the Ex2007 Edge Transport go to:
Microsoft Exchange | Edge Transport | Anti-Spam
Otherwise for Ex2007 Hub Transport install the anti-spam agents:
http://support.microsoft.com/kb/555924
Next go to:
Microsoft Exchange | Organization Configuration | Hub Transport | Anti-Spam
Open the properties for Recipient Filtering and tick the checkbox:
‘Block messages sent to recipients not listed in the Global Address List’