So I now know Exchange should not be on a DC, unfortunately it's too late. I have not yet put Exchange in production, so no mailbox data to compromise. I'd rather not reinstall everything if I dont have to, so I'm wondering if I cant just demote, and deal with fixing exchange... Has anyone been through this? Also if I left it a DC, can I just remove the AD role?
2 Answers
Ouch. While exchange isnt recommended to be run on a DC it will indeed work as you have seen.
My recommendation is to remove exchange, move all roles off the ad server, dcpromo the server, format, and start fresh with exchange.
While it is technically possible to remove AD while the server has exchange on it, it is not recommended and you will likely run into problems with exchange, if not now, further down the road. Best to avoid those while you can.

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+1 for the fresh install, I like my products to be as fresh as possible before hitting production. – ErnieTheGeek Feb 28 '11 at 14:54
I've done this with 2003, and didn't have really any issue. Just make sure that when you build your new DC that you make it master for the FSMO roles and that it is also a Global Catalog server.
Double and Triple Check that everything is setup for the new DC and that it is the PDC emulator and has control of all FSMO roles and is a GC.
Then just demote the current Exchange/AD server...I'm sure there will be some clean up issues that arrise. Though I can't think of anything specific off the top of my head.

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Awesome. Well I already have my GC and FSMO mastered by the original DC on the network. This is my triple/quadruple check before making changes... I'll post results. – Seth Feb 28 '11 at 15:24
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