Environment: Centos 5.5, qmail, vpopmail, squirrelmail

domains/host involved (example):
abc . com -> 10.1.1.1 (server I am controlling)
xyz . com -> 200.1.1.1 (remote server)
mail . xyz . com -> 200.1.1.2

Scenario:
1. user at abc . com is sending email to user at xyz. com
2. user at xyz . com received the email.
3. user at xyz . com reply to user at abc. com.
4. user at abc . com does not receive the email.
5. user at abc . com can receive all email from other domains except xyz . com.

Steps taken:
1. /var/log/qmail/send says: Delivery success but then user_password_not set.
2. Tried telnet smtp 25 to abc. com: From is set to user at xyz. com and recipient is set to user at abc. com.
Gone as far as message editing when syntax error popup
3. Tried telnet smtp 25 to xyz. com: From is set to user at xyz. com and error Smtp relay denied after setting recipient to user at abc. com
4. Tried a new entry in qmail smtproute by adding ip address of mail. xyz. com, bounce message received when retrying:
Sorry, I wasn't able to establish an SMTP connection. (#4.4.1)

My questions:
Hi guys, am I on the right track or way off? I also want to know which side is the problem, abc. com or xyz. com. Both are not blacklisted. abc. com does not blacklist xyz. com. But I don't know about xyz. com, I'm pretty sure it don't. Do you have any solution to this?