I am not a win2k admin, but from what I have read people try to avoid using Active Directory unless they specifically need it and cannot do with any other solution. (I believe there are possibly some security issues with running Active Directory on a webserver... not 100% sure on that one though).
Anyway, Mike is probably one of the most respected win2k guys on these boards, so definitely go with whatever he says.
AD is a pain in the ass. ION myhosting box i avoided it like the plague use Simple DNS and you will be much happier. Its simpler to use and other than the little terminal window tray icon quirk its the perfect quick and dirty solution.