I was wondering if anyone could point me in the right direction on setting up a domain licensing server (I am trying to setup a terminal server).

When I started this project, I installed terminal services correctly. But that is when I found out I didn’t have a licensing server. I’ve tried searching Microsoft and google for setting up a license server with out any luck. Any help or ideas will be greatly appreciated.

I believe I just found what I'm looking for. Do you need to just add remove windows programs and check Terminal Services Licensing?

Yes, that will install the Licening Manager. You still need to decide if you want per user or per device licenses and purchase those. You also need to install the licenses (license pack) on the license server so it can hand out the licenses to clients. There is a 90 day ( I think it's 90 day, not 100% sure on that) grace period for you to get this in place.

You may also want to read up on how licenses are assigned. It can be a bit confusing.

Unlike Windows 2000 TS, all devices that connect to a Windows 2003 TS need a CAL (client access license).