YES, it is possible to have a computer be part of two different domains, just not at the same time.
When a computer is part of the domain, and a user logs in, a profile is created in the Document and Settings folder with the user name. If that computer joins a NEW domain, and a user logs into the domain a new profile will be created with the folder username.domainname format. Users can switch between profiles, as they switch domains. The same things happens when trusted domains are created, and multiple domains are shown in the drop down list on the login screen. A profile will be created for each user, in each domain. The probems come in with the My Documents folder and maybe others. Its not available from domain A, when logged into domain B.