How to switch from hosted web/email to exchange?

Hello All,

I have quite the task to do and don’t really know where to start.
Currently we use a hosted web/email solution however we are going to purchase an email server along with MS Exchange 2007. We already have an AD server which uses a local domain (company.local not company.com) for the DNS.
Basically I want to know how I have to set things up, I know I have to change the DNS settings to point to our DNS servers and add the DNS entries to the DNS Server.
Do I have to re-do my whole domain and make it use our public domain name or is there some way around this?

Also our AD/DNS server is only 2000, I want to switch it to another box which has 2003, is that much of a task?

Any help with this is greatly appreciated.