How to Install Active Directory
Login to the box either locally via console, or through RDP
Go to Start -> Run and type in "dcpromo"
For most cases you will select "Domain Controller for a new domain"
For most cases you will select "Domain in a new forest"
Enter in the FQDN (fully qualified domain name) that you want to use. For example, if your domain was to be called Domain.Com, you would enter Domain.Com. You can also use non existant name spaces such as Domain.Local, or Domain.abc
Afterwards it will also allow to set the NETBIOS name. This is almost always the same name you entered above, only with out the .com (.local, .abc, etc).
The next two screens will be where to place file repositories and service folders. You can accept the defaults.
Some users may now get presented with a DNS screen asking you to configure DNS, or to do it later. Select the middle option (Install and configure for me). This will most likely NOT set up dns properly. Once finished, please see http://wehow.ehow.com/how_2002003_fix-active-directory-dns-problems.html for isntructions on how to test - and if necessary - to fix DNS.
Select the permission type you would like. There are two options. If you will only be using Windows 2003
and Windows XP or newer, then select the Second option. otherwise, you would need to use the first option.
Pick a "Directory Services Restore" password. Hopefully you will never have to use this as its quite messy for the inexperienced. In either case, Remember this password.
At this point in the installation you are presented with a basic "Sumary" page listing the options you have selected. Make sure these are set properly before continuing. once you select "Next", active directory will begin to install, and once it does you will not be able to stop, and you will have to first uninstall in order to go back and fix any problems or misconfigurations later.
Active Directory will take a while, it could be a couple minutes, or as much as half an hour. Once it is done you will have to reboot.
Overall Tips & Warnings
Install DNS before installing Active Directory
Create an additional local admin account if you do not already have one before installation. This account will still be there after AD install, and you can use it to login in case of trouble.
I highly recomend not changing the NETBIOS name unless you know what you are doing.
If something happens to your domain controller and you forget the Directory Services Restore password, you may as well reformat.