We have content on two domains, between two CMS applications. One on "www2" and another on "www". The default page on the "www" domain redirects to the  homepage on "www2". This causes Microsys to immedialtely stop the sitemap indexing process when it encounters the redirect. Is there a way to configure the options to handle this so content on both sites get indexed within one sitemap file?

Yes, look into root path aliases config in A1SG. Designed for situations like that If you need help, feel free to provide more details here or email or PM

I tried that option, but it still stops as soon as it encounters the redirect. The redirect from www to www2 is a meta redirect in the default page, if that helps.

Please email me with site details (address):
http://www.microsystools.com/home/contact.php

And I will take a look