I have been trying to do similar stuff. Here is a brief overview of what i actually wanted to achieve.
1. Run windows Server 2003 as the single AD domain controller. no other DCs in the domain.
2. Run DNS on this single server to serve for local name resolution as well as resolving internet names.
3. This server is a dual-homed computer, one nic is connected to the local LAN and the other NIC is connected to the internet through a router.

IP addresses i am using is as following:

Local LAN card:
IP on server: 10.1.1.1
subnet mask: 255.0.0.0
gateway not set on this interface
DNS pointing to 10.1.1.1

Register this connections address in DNS and use this connections DNS Suffix in DNS registration both ticked.

Server interface connected to router takes its IP from router's DHCP which is in the range 192.168.2.2 - 192.168.2.32
Router's internal IP is 192.168.2.1.
The second interface is pointing to 10.1.1.1 as its DNS server.
Register this connections address in DNS and use this connections DNS Suffix in DNS registration both are NOT ticked.
I have not set any gateway on any of the interfaces. RRAS is not configured on the system and its not running any routing. ALSO no forwaders have been set in DNS settings.

MY DNS works perfectly. It resolves internal as well as external names successfully.
I have reached this solution after playing around with the setup for a while. Though the system is working perfectly at the moment, I am not sure what will happen when i would enable RRAS on this server and try to configure VPN.

What I do not understand is that how is this whole system working here - no forwaders set to forward the external resolution queries to, no routing configured to route packets to the external side interface. Just dont understand whats happening here and how is it working. COnfiguration explained above might help others to configure their dual-homes DCs on windows 2003. BUT I STILL NEED SOMEONE TO HELP ME UNDERSTAND HOW IS THIS WORKING????? PLS COMMENT

warmncandid

From what I see of your setup, it shouldn't work.

Typically, in a small LAN, you would want all devices, including the router's internal interface, within the same subnet.

In all honesty, unless you're using the server itself to host the internet for your LAN, you don't need two NIC's on it. If you are using the server to "host" the internet, you would need RRAS/NAT or at the very least ICS along with dual NIC's (one external, one internal).

For this, your setup would be:

Internet >> router >> switch >> server(s) + clients

I suspect somehow, you're getting your DNS resolution from your ISP on the external NIC. Do you have any client PC's in your LAN? Are they able to get DNS resolution too? I would wager your clients aren't getting any resolution.

Thanx very much for responding Curt.. I was basically trying to configure this server as a VPN server and thats why i put two NICs in it. Also i would like to mention that i was using Port forwarding on my router because i dont have a public IP for this VPN server.
Ans I did try with a client machine and the DNS was resolving perfectly. I agree that logically speaking it should not work and thats why i put the question here.. in case someone might have an insight..

warmncandid