I've been happily running ESX and ESXi standalone on a few servers for a couple years and wanted to evaluate vCenter for HA, vMotion, etc but currently don't have an Active Directory installation. From Installing ESX 4.1 and vCenter Server 4.1 best practices:
Make sure that the system you use for your vCenter Server installation belongs to a domain, rather than a workgroup.
Ensure the system on which you are installing vCenter Server is not an Active Directory domain controller.
Up until this point I've avoided windows infrastructure and saw a windows server dedicated to vCenter as a necessary evil, but do I really have to setup two servers and an AD installation just to run vCenter?
Are these just 'best practices' or are they requirements. Is anyone out there running VMWare vCenter on a standalone Server 2008r2 with SQL Server Express, if so are there any gotchas or limitations of such a setup? Any special steps to get everything working?