domain vs workgroup

Bryan, I will try to help you out here. First I wanted to make clear that you should stray away from using "Primary" and "Backup" for server titles. When NT 4 was introduced, you could configure your servers as a Primary Domain Controller (PDC) and Backup Domain Controller (BDC), but since the introduction of Active Directory and Windows 2000, this configuration has been stopped and multiple servers will now simply "Replicate" the information in Active Directory.
Moving on, remember your "Backup server" cannot really "backup" your Active Directory and DNS. This is because of the replication that occurs with Windows 2000 and again, exists in Windows NT server platforms. So is your "Backup Server" another Windows 2000 Domain Controller that replicates Active Directory and DNS? As far as DHCP, you can only have 1 DHCP server so I am misunderstanding your backups of DHCP.

Your laptops- they should, without any consideration, should be joined to your Domain. When these laptops log on to your Windows DC's, they can then pertisipate in network activities like printing and file access properly.
Purchasing a network-attached storage is fine but I wouldn't suggest using it as a file server. I would retain all NTFS permissions on your Windows 2000 Server's and use your Network storage device for other means. Perhaps archiving data or non-in-use files/folders. I also don't suggest using it as a means for backup storage.
As for your statement, "So I'm wondering if I even need the two servers anymore" as me concerned about your network. Did you pay for any licenses for client access on your Windows 2000 Server? If you did, it would be absurd to stop using the servers after investing in them. As far as your "problems" concern, you will run into every problem removing Domain controllers, DNS, DHCP, moving Files and folders to a network-attached storage device, change printer locations and changing your DHCP.
My strong recommendation is: You should invest in a Windows 2000

I would have to agree with jonnywatt. Even though it may be able to perform print sharing and DHCP it's not going to offer authentication or user management type services. DNS is also something you'll probably miss.

Given that the domain is already configured, it would be a backwards step to revert to a workgroup situation. Purely from a security standpoint you're going to want the ability to use file permissions and decent user logon security, a worgroup can provide file permissions, BUT you would have to set up the users and/or groups on every computer so that they are all the same. You can see adding an account for a new user would be a major hassle even with your small network. You'd have to add the identical account on every computer that they will access. With the domain, you just do it once in the directory. Workgroups also don't provide much logon security, and no logging of network activity.

The domain setup provides a lot more flexibility and control, even if you're not currently using the features. NAS systems are only really intended to provide additional storage and maybe offload some basic sharing functions. Since you have two DCs already, there's not much point in spending the money unless you REALLY need the space. You'd be better off putting a large HDD in your existing servers for a lot less cost.

sounds like it aint broke and, accordingly, i would not fix it.
just having dns all set up and ready to go as previous answer stated, is worth keeping the domain for. your questions indicate big study period in your future. you cannot make decisions very well imho without understanding this stuff better. go for windows server certification of some sort to get you started...ask, 'how will i recover if meteor falls on server room?' to get you stake in the ground...
you have probably heard that microsoft claims a workgroup is easier to administer for a small workgroup of highly technical users. technical users being the operative phrase. i had a small domain set up with only 3 workstations and switched it from a domain to a workgroup, guiltily thinking i was imposing higher overhead on my customers than was needed. what a pita that has proved to be. with a domain, you are all set to administer from a single seat. you need that with 20 users.
don't run dhcp on your network, btw. move away from that. get them to buy you some mcsa training and embrace your ad and learn how to use group policies. start by figuring out EXACTLY what you would do if your AD server goes down. practice it. and what you would do if the nas goes down. how you backing that up, anyhow?
..whatcha got for raid on the files servers btw. whatcha doing for defragging? how the event logs look these days?
if you switch to a workgroup, you will need (probably) to run around and configure access on each computer. with 20, you are beyond practical. your ad domain your buddy set up is the way to go.
regarding the 'backup' server. keep it. why is the question coming up? is it consuming resources you want elsewhere? is it giving problems. do you covet it for your testing lab (this is the correct respons btw) just my 2 cents...

You can run a Network Storage Device on your network, you just can't run the DHCP server that comes with it on the same subnet as your network DHCP server.

you use the term backup server however if its a domain controller to provide redundancy, don't get rid of it. you would have to dcpromo demote it to a member server and you would lose your redundancy.

If you convert your domain to a workgroup, you lose a central point of authentication, group policies, and central administration features a domain provides that a workgroup does not. In a workgroup invironment, if a user changes their password, you have to go around to all the computers and change the password for that account on each computer to maintain access to shared resources. The password change in not automatically replicated throughout the workgroup.

Buy the network storage device. install it as a shared object on your network, publish it in Active Directory so users can find it. Direct users to store documents there or redirect the my documents storage to the NSD by group policy for the user or group of users you want to store their documents on the NSD.

most of what i had to say has been said but the purpose of a domain environment i s mainly control of access to resources hich i theink should be priority i would strongly suggest not disturbing the domain setting