First of all, make a clean installation of windows server edition, like win2k svr or win 2k3 svr.
make all win updates, setup a static ip with subnet mask; for the dns ip you can use the same ip for the machine, and the machine has to have network connection, i mean the machine has to be connected on a switch or hub, place the installation windows cd then from the run dialog box type dcpromo, follow all the instructions.