Forest and Domain Functional Levels
Active Directory has a number of functional levels that dictate what features are available and what versions of Windows can serve as domain controllers. In a forest that includes any Windows Server 2003 domain controllers, there are three forest functional levels, and four domain functional levels. This is an increase from the single forest functional level and two domain functional levels available in Windows 2000.
The following sections help you sort out this increased complexity and figure out what functional levels are appropriate for your network.
Choosing a Forest Functional Level
There are three forest functional levels available in a network with Windows Server 2003 domain controllers: Windows 2000, ...