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I'm running an AD environment with a virtual DC running 2008r2 on Hyper-V, a physical DC running 2008 at a remote location, and another physical DC collocated with the vitual DC, running 2003r2. This last DC is very old and the hardware is failing. I am transitioning roles off of it. The plan will be to put in a new DC running 2012. Forest is at 2000 and domain is at 2003. I have to raise the functional level of the forest to install the new server, to a minimum of 2003. Should I go through all the work of preparing for this transition only to stop at 2003, or should I just change both forest and domain to 2008? It's a very simple environment (7 policies in the whole thing and about 50 users). I'd rather raise it as far as possible- what are the risks? I know rolling back is a big deal, and the change will have to complete late Saturday night, so time is a factor. What is the likelihood of failure? None of our custom apps even use AD. Other considerations: we heavily use Citrix XenApp 5 as a terminal server, Exchange 2007, SQL Server 2005, 2008, 2008r2.

Thanks!

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Updating to a 2008 functional-level should be just fine. Your environment is not old enough to run into any significant issues, and you're retiring the oldest thing there as part of this. Should be just fine.

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Well you need a compelling reason to do so. I haven't done this in my environment yet but think it's a pretty slick feature with a function level of 2008r2+. Active Directory recycle bin....http://technet.microsoft.com/en-us/library/dd392261(v=ws.10).aspx

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