If I were you, I would consider running PowerDNS, an ODBC-powered DNS server. There is no recursor so you can't look up external domains if you're running PowerDNS, but if you're hosting websites it's a GREAT name server and you don't have to mess with active directory or text files. Want to add a new domain? Just add it to the database.
Anyway here's the doc on Microsoft's site if you still want to use MS.
[microsoft.com...]
Remember though PowerDNS is not a recursor so you can't use it as the DNS you use on your system to access the web. It's for hosting and that's about it - if you need OUTBOUND access (access to sites not defined in your own DNS) use your ISP's name servers.
In other words... in "network properties" on your system, enter your ISP's name servers and not your own. For the domains you're hosting, point them at the registrar to your PowerDNS-enabled name server.