SQL Server Fail-Over Clustering runs on top of Windows Server Fail-over clustering.
You do need at least one AD box and two is preferrable, though the second one can actually run as a virtualized instance. AD is required as the fail-over process advertises the new name and IP address combination. You will need to set aside an IP address and name for each fail-over service (DTC, SQL Server, etc.)
Minimum number of systems in a cluster is one, but for fail-over functionality the minimum is two systems and two instances of the service and a quorum disk.
Drives need to be shareable across systems -- Windows Fail-over Cluster Configuration will test this.
I generally install a Fail-Over instance of DTC before I install any SQL Server fail-over instance.