When you upgrade to Windows Server 2003 from NT4, you can expect Setup to do the following:
Retain the computer's Security ID (SID) and domain membership.
Convert user profiles to Windows Server 2003 format. The profile location remains at \Winnt\Profiles, as opposed to the new location in Windows Server 2003 of \Documents and Settings. Any new profiles created after an upgrade also go in \Winnt\Profiles.
Retain application and driver settings in the Registry if they are compatible with Windows Server 2003.
Remove Registry entries for applications or drivers that are deemed incompatible by the upgrade compatibility checker.
Retain the contents of the SAM and LSA databases on standalone and member servers and desktops. ...