How to install W2k with Active Directory

We are in process of the same idea. We have set up a test network of 7 machines to test and implement the upgrade.
Our machines are: Win2000 professional, Win 98, Unix box running Samba, 1 NT 4 PDC, 2 NT 4 BDC?s , and a Win2000 Server for the EmptyRoot.
First: Download the document ? Best Practice Active Directory Design for Managing Windows Networks? from the Microsoft site.
Second: Read and fill out the forms for how you want to see your network.
Third: Use a test network to validate and document all the steps necessary for a successful upgrade.
Now for the fun stuff.
Add a new machine NT4.0 OS. Make this a BDC and add to your network.
Synch the 2 BDC?s and the PDC. Remove one of the BDC?s. This will be your fall back machine in case the upgrade fails.
Bring a new Win2000 Server and make this your empty root. Add Active directory and DNS. Upgrade existing PDC to Win2000. Join the empty forest root as a child domain. Add WINS and DHCP to this machine. When you set up your first Child Domain the NETBIOS will ask you to verify name of domain for pre-Win200 Machines. This name should be the same as your existing and current domain. This way your users should not need to have their machines modified to still access the network and services. Ensure you set up your forward looking zone in DNS. Establish trusts in both directions Child to Parent and Parent to child. Make sure your exclusion for IP addresses are in place for the DHCP. Now bring in other machines as needed.
This is not an all encompassing response. This is generated as a rough scope of the work involved. It should give you a feeling for the work involved. This is based on what we have learned from using our test network.

Hello Faisal:
I am in the midst of this same rollout at my organization. Here is how I am planning it:
1) Design your AD structure. Make sure you know how many Sites and OUs you want to use, what machines/users/objects go into each container. If you set this up wrong, it could make like very unpleasant. Personally, I created some Visio charts of the AD structure, with containers, and how the domain naming scheme (with child domains) will look like. I suggest do this first. Make sure you know EXACTLY how you want the AD to look like when done.
2) Set up a new NT4 BDC. Let it synchronize up with the NT4 PDC. Once done, turn this new BDC off and store it somewhere. IF there is a problem with the upgrade, you will be thankful you have this BDC hidden underneath your desk in order to restore your NT4 domain. Trust me on this one!
3) Get a Ghost image or tape backup image of your PDC and all BDCs. This is a paranoid step, but we are paid to be paranoid!
4) Upgrade the PDC. Install Win2K on it, and select it to be a Domain Controller (remember, in Win2K, all Domain Controllers are the same; there no longer are Primary and/or Backups.)
5) Upgrade your online BDCs to Win2K as Domain Controllers.
6) Look at your AD chart, and start to design the Sites, Organizational Units and Domain Controller placement. YOu might have former NT4 BDCs that are now Win2K DC that you DON'T need. But you DO need at least 1 DC per Site. It depends on your physical network topology/design.
7) If everythign is working like it should, then take that NT4 BDC that you have hidden under your desk, plug it in, and upgrade it to Win2K, but tell management that, since the Win2K upgrade went so well, you are keeping this machine to be a Game Server! :-)

Anyway, that is my plan. Hope this helps.

On more thing the IP's are provided by our ISP at our HQ & ISP have their own DNS server. So how to configure DNS before AD for our office.

1) Should it be secondary DNS to ISP's DNS
2) Should it be installed on DC or any other member server will be used.