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With 1 physical server machine (installed with Window Server 2008R2), can I have two domains? For example, testA.com and testB.com. Each of these two domains has its own user groups.

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Not as I think you're hoping to have. A single machine can be a domain controller for a single domain.

But, what you can do is use the Hyper-V role on Windows Server 2008 R2, or replace it with another hypervisor (such as VMWare ESXi) and use that to create two virtual machines. Each of these virtual machines can be a domain controller of different domains.

Depending on your virtual network setup, you could create testa.com and testb.com totally separately (and perhaps do a trust between them if you need to), or make the testb domain a child domain of testa.com so it would become testb.testa.com (you still need to do trusts in this scenario).

Depending on the version of Windows you have licensed, you are entitled to a certain number of virtualised instances of the OS. For example, Enterprise edition you get one physical + four virtual.

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Just for clarification, in a parent-child domain an automatic two-way transitive trust is created between the parent and the child domain. No manual configuration of the trust needs to be made. technet.microsoft.com/en-us/library/cc773178(v=ws.10).aspx –  joeqwerty Apr 10 '12 at 11:47
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