Hi 1A2guru,
Looooong distance. Man, that is going to cost. For the money they may spend .... I only do this locally.
Have they looked into faking a T1 at each end and useing a VPN? The real solution would seem to be the IP Office. Failing that, change the Partner to a small Magix. At least you could do more advanced stuff.
Anyway, the first solution is just copper CO's connecting the systems as far as the switches are concerned. A call can be transfered to the other system. I would use a monitored transfer to the other reception, then to the other party. There will be a delay as the call is placed and answered.
-Chris