Hello All,
Soon I will be migrating to a new domain from my current domain which is supporting 3 users and 4 computers (it is a home network) as I have come into possession of some nice hardware which is not currently being used.

Due to the high end nature of this hardware (Xeon W3520, 9GB of RAM, 600GB disk space), I would like to setup a Hyper-V server to consolidate my current two physical servers (a DC and a File Server) into two separate virtual machines, with the option to add more virtual servers later.

My question has to do with the DC. Is it "wise" to have a purely virtual DC running off of a pure hyper-v server, or should I install 2008 R2 on the physical PC and install both the hyper-v role and AD Domain Services?

Also, hyper-v is CLI only. while simple to configure, how does one install virtual machines onto it? is it done through the Remote Server Admin. Tools?

I run a Virtual DC for a network of 200. Have no fear. However, make sure you have a 2nd DC or good backups of your AD/LDAP. Although with only 4 machines, rebuilding the domain isn't such a big deal in the event of an AD database failure.

But 'virtual' is the way to go. IMHO

As for the HOW TO on a guest OS installation... look right here:

Well I decided to install 2k8 R2 as my primary DC and then install the hyper v role as well. The end result, I have a virtual Fileserver, and a second virtual DC on a different disk (in RAID1) that I can use in the event of an AD database failure.