Multiship

This app works just as described, the order flow up to fulfillment is flawless, including order statuses at creation - in the event your store needs to wait for payment confirmation (ie pending) before fulfilling orders. Each sub-order created by Multiship also reference the initial order in the Tags section, so handling returns and cancellation is easily manageable. For those of us who use a third party fulfillment app such as ShipStation, it will integrate without a glitch, including shipping types and order notes.
Customer service is top notch, ie timely response and very helpful! If you are looking to have custom messages for each items shipped to different addresses within the same order, I would recommend GiftShip from the same developer, it has the same features as this app with the addition of custom messages that corporate customers will enjoy.