To allow an Exchange 2010 Client Access server to proxy Outlook Web App requests to an Exchange 2007 Client Access server in another Active Directory site, you must copy the highest-versioned folder from an Exchange 2007 Client Access server in the destination Active Directory site from the %installpath%\ClientAccess\OWA\ folder to the same path on the Exchange 2010 Client Access server that's making the proxy request.
since I cannot test this in the lab.
Will copying the highest version OWA folder from the remote site Exchange 2007 CAServer to Exchange 2010 CAS in the headoffice which is Internet facing .. not screw up the existing folder on Exchange 2010? It replaces the existing folder on Exchange 2010 CAS.
Can somebody please provide some insight how does this work just trying to make sense of it?
You need to copy the directory to the new path, not only the files. So you copy %installpath%\ClientAccess\OWA\MyFolder123 from the 2007 server to %installpath%\ClientAccess\OWA\MyFolder123 on the 2010 server.