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We have a Domain controller in server 2008 Enterprise and Additional DC in server 2003 R2. Now I need to upgrade Additional Domain controller to Server 2008 Enterprise and raise the domain functional level to 2008. The DC is running with Active Directory, DNS and DHCP. The server is installed in VMware ESXi 4.0. Please guide me to carry out the upgrade. Also I want to know about the possible risk of in-place upgrade, if any.

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If these are virtual I would be tempted to build a 3rd domain controller in 2008, make sure everything is working correctly and then shutdown the 2003 R2 one, change IP/DNS etc. – boburob Sep 21 '12 at 10:22

There is no direct upgrade path between Server 2003R2 (x32) and Server 2008 (R2)(x64) . Microsoft documented the upgrade procedure very well however, and in your case, a simple dcpromo (demotion) backup of the DHCP settings and after that set up a fresh 2008 box, install AD/DNS/DHCPservices and put a backup of the DHCP configuration back on to it should be the way to go.

This is the place to start for documentation on the process.

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I am planning to upgrade from 2003R2 (x32) to 2008 Ent (x32). – Yadhu Tony Sep 22 '12 at 5:52
@YadhuTony Well, don't, but either way, you can't directly do an OS upgrade on a Domain controller. – HopelessN00b Sep 23 '12 at 23:14
@YadhuTony As Hopeless said, don't do that... Active Directory is the single most important service in your network, keep its installation extremely clean, do not try any sort of upgrade. Build a clean VM/box, dcpromo, etc, demote the old Controller once the new one is working and slowly phase out it's services. – Chris S Sep 24 '12 at 0:12
@ChrisS : Thank you for your reply. As you said, to be on safe side, I am planning to do a fresh installation. – Yadhu Tony Sep 24 '12 at 3:43
@ChrisS : I just tried to do the upgrade and it became a success. But as you said it is a very risky process and not recommended too. – Yadhu Tony Sep 26 '12 at 7:25

I tried to do the upgrade and it became a success. Here are the steps that i have taken before upgrade.

1.Server hardware was checked for compatibility with the Microsoft Assessment & Planning Toolkit 2.Software compatibility was tested. 3.All non-Microsoft applications were disabled with msconfig and DFS service was disabled. 4.Hardware has been checked for faults including tests with chkdsk,diskpart, netdiag, dcdiag, and defragmenting the disks.
5.Forest and domain has been prepared using adprep /forestprep & adprep /domainprep. Even though it became a success I won't recommend the in-place upgrade because of its potential risk.

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