Hyper-V Virtualization on Dell R610

Are you planning on using any management software for these hosts? I would assume that at the very least you'll be using hyper-v manager. If that is the case I believe that you would want to add the hosts to the domain so that you can manage them from a management station or your machine. Which version of Server 2008 are you planning on using? You might want to look into server core.

Thanks Lucas for your response.
Isn't a problem with the cyclic dependency of the Host and Guest DC?
If the Host cannot see the DC which is on the VM, how can we start the host and login to the domain?

Ok, now I understand the question better, you're absolutely right. If one of your VMs is going to be the Domain Controller then yes there is a problem of dependency. I know that the best practice whitepaper that we followed here on site advised against of having only one DC and it being a virtual machine. If the DC is offline you would still be able to use local authorization and/or cached credentials, obviously niether of which I would trust a production enviroment to.

Great replies @TWLucas.

@PChai- adding more references.

1. http://blogs.technet.com/b/vikasma/archive/2008/07/24/hyper-v-best-practices-quick-tips-2.aspx .

Configure Domain Controllers to Optimize Performance
Domain Controllers are supported in Hyper-V when running in a virtual machine. The following best practices are recommended for these configurations: Never save state in a domain controller as this may cause synchronization issues in the domain. Never Pause a domain controller virtual machine for long periods of time as this may adversely impact replication. Always shutdown a domain controller. Do not take snapshots of a domain controller. Make a determination regarding time synchronization. The decision is either to use the Hyper-V Integration Service for Time Synchronization or not. If the decision is to treat the virtualized DCs like hardware based DCs, then disable the Time Synchronization capability in the Settings for each virtual machine and point the PDC Emulator to an external time source and allow all the other DCs to synchronize with the PDC Emulator. If the decision is to synchronize with the Parent partition, only enable the Time Synchronization capability for the DC holding the PDC Emulator FSMO Role.

2. http://technet.microsoft.com/en-us/library/dd239199%28WS.10%29.aspx .

Configure domain controllers for optimal performance
You can run an Active Directory domain controller in a Hyper-V virtual machine. The following best practices apply:
* Never save state in a domain controller. Doing so can cause synchronization issues in the domain if you revert to the saved state.
* Do not pause a domain controller virtual machine for long periods of time. Doing so can adversely impact replication. Instead, shut down a domain controller when necessary.
* Do not take snapshots of a domain controller. Microsoft does not support this functionality in these scenarios.