Chances are you're just a rabid anti-Notes troll, but I'll bite anyway.

Lotus Domino and Microsoft Exchange are different products: the first is a "groupware" platform that happens to do mail, the other is a mail server that might be linked to some other Microsoft platforms (notably: sharepoint). The Notes client can be used for accessing "databases" (which are actually a container with semi-structured data and application logic in one), for which IBM provides a "mail database" that is kinda capable of handling mail. Outlook is a superb mail client that does nothing else unless you've got someone willing to create "outlook foms" that link to other MS technologies.

The good about Domino/Notes:

• Domino is multiplatform, Notes kinda (current Linux client is barely usable)
• Security is a design fundamental in Notes/Domino. Notes has been doing private key crypto and signed code before Exchange was even conceived.
• Domino/Notes is way better when integration company processes/workflows in your mail environment.
• Restoring backed up mails/documents/databases can be done relatively easy, and has been like that for at least 12 years.

The bad:

• The Notes UI is infamous because it is so different from Windows and counter-intuitive to some people. This is for the major part historical (i.e.: Notes has been developed as a multiplatform client, and it includes a lot of legacy). If you want you can easily update the design of your mail database and replace it with an open source one (try that with Outlook ;-) -- see openntf.org for that. If you really want, you can just use outlook with Lotus Domino natively with the DAMO plugin.
• The learning curve for Domino administration is steeper than that of MS Exchange. The impact of a good administrator versus a not-so-good one will be much more visible in a Domino environment than in an Exchange/outlook environment. Getting both to go further than a couple of machines requires good admins regardless of the technology

The actual cost per user won't differ that much between either platform, and the featureset is different. If you're a Microsoft shop and have an all-windows datacenter, SQL Server, Sharepoint portal and whatnot you'll be installing Exchange. If you're not already linked as much to Microsoft technologies chances are that Domino/Notes is a better choice. If you're sensitive regarding security (or having to abide to certain security regulations), Domino/Notes is probably your best shot (a lot of banks think so, anyway).

So, it's not a black and white issue, and there are very good reasons why Notes and Domino can be a better choice for a particular situation.

Disclaimer: I know a thing or two about IBM/Lotus technologies (and of Microsoft and Linux, so don't hold that against me ;-)