Here is how to setup Microsoft DNS Server on Windows 2003:

1. You need to install the DNS component on the server.

2. click on start->settings->control Panel->Add and Remove Programs

3. click on Add/Remove Windows Components

4. When the Windows Components Wizard opens, make sure there is a check in Networking Service and click on ‘details’ and make sure there is a check in Domain Name System (DNS), click on ‘OK’ and then ‘NEXT’ to install the module. If it asks for a location, point it to the c: drive to the c:\i386 directory.

5. Now click on start->Prorams->Administrative Tools->DNS

6. Once the window is open expand the localhost by clicking on the + besides localhost.

7. right click on Forward Lookup Zone.

8. Select New Zone…

9. Go through the New Zone Wizard, select primary Zone, next, enter zone name (domain.com), next, click next again, and next a third time for Do not allow dynamic updates, finally click finish.

10. Your domain you just setup should show up beneath Forward Lookup zones.

11. Right click on the new domain you just added and select New Host(A).

12. Enter the A record that you would like to propagate (i.e. www for www.domain.com to work), and point it to an IP address.

13. Add additional ‘A’ records as needed. You must add the ‘A’ record for your nameserver for it to propagate.

14. You can test this by opening a command prompt and doing an nslookup on your domain. If your domain hasn’t been pointed to your new dns server, you’ll have to point your nslookup query to your server manually.

Now open a cmd prompt on your local box, and type: nslookup www.domain.com (replace ‘domain’ with your actual site). If everything comes out okay, then you’re all setup. If it doesn’t try again like this:
(still within nslookup):

server x.x.x.x (your nameservers IP)
www.domain.com

If that comes back, then the problem lies in your NS records at the registrar, or the registrar’s NS records for the domain.)