Here's our scenario.
We have two machines, Machine A is a Windows Server 2003 SP2 machine that is setup as the Domain Controller. Machine B is a Windows XP SP3 machine that is to be joined to the Domain Controller that is Machine A. Both machines have a single LAN card.
Both computers are connected to our corporate LAN. Since our corporate LAN has DHCP enabled, both computers were automatically assigned their dynamic IPs and DNS servers (Both lan cards were set to "Obtain an IP address automatically" and "Obtain DNS server address automatically")
Machine B was joined to the domain (ian.sd.local -- Machine A). The machine was successfully joined to the domain (validated by a welcome message) after asking for a domain admin account. It then asked for a reboot.
After reboot, we logged in to the domain using a domain admin account. It went in normally. We then created a new folder then shared it to check if we can retrieve the accounts from the domain controller, we can't. From the Sharing tab -> Permissions -> Add -> Select Users or Groups dialog box, clicking on the Locations button, the DC won't show up.
Another thing, pinging the domain controller from the client machine using FQDN will fail. While pinging it using the machine name only will succeed.
I somehow know what the problem is. Since the client machine is set to automatically obtain the DNS server address, our corporate LAN gave us our own "corporate DNS server" (used by our corporate domain controller), thus resulting on the client machine not being able to "resolve" the FQDN. However, I am still not sure why the "domain controller" cannot be found on the "Select Users or Groups" dialog box.
Anyway, hardcoding the domain controller's IP address as the client's Preferred Primary DNS server fixes the problem.
My question is, is there an "official" Microsoft document that tells the user to set the domain controller's IP address as the client's Preferred Primary DNS server? I am asking because a tester on our company used the above setup to install one of our software and it is failing because of this. I need to prove to him that this is a configuration issue and not an issue with the software.