We are a small business. We currently use Small Business Server 2003 which has Exchange 2003 built-in.
What features of Exchange are you using? Push notifications? Calendaring. Sharepoint? Figure out what you want and what you need (and which are two separate lists) and then map that over to what Mac OS X Server, or to what a Mac box with the Kerio Connect package loaded, might provide you.
Can we migrate from Exchange 2003 to Mac OS X Server mail services?
That's rather open-ended. It's possible, but there's no single definition of small business mail requirements. Some small businesses can and have, and some might find themselves missing critical features.
Can Office 2011 connect to Mac mail services? If so, what protocols?
iWork does well enough to read and write Office files locally, so I don't have experience with Microsoft Office. The Windows mail clients can certainly access Unix mail servers. As for what connectivity is present within Office, I'm way too rusty with Windows to comment. What used to be the Outlook Express client worked just fine with Unix mail servers. The full-on Office Outlook client was pretty flaky with stuff other than Exchange, but that was some years ago.
Biggest issues with SBS migrations tend to be with shared Address Book, with shared Calendars and with Sharepoint services; if you're heavy users of those features, you might find the Mac OS X Server implementations lacking. Kerio can potentially help here.
Look around the forums for some other folks. This particular SBS migration has been fairly common fodder for discussions.