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&quot;&quot;&quot;&quot;SBS has to be the only domain controller in the domain <br />
Incorrect - it has to be the first DC and hold the roles but there can be additional<br />
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&quot;&quot;&quot;they'll need to wipe the server out and put 2K3 Standard <br />
Again not true, <a href="http://support.microsoft.com/kb/884453" rel="ugc nofollow">http://support.microsoft.com/kb/884453</a><br />
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I would leave SBS as the new Domain and join your other Servers/DC's to it
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I apologize - I misinterpreted the comments as the main goal was putting Exchange in the environment and that's it.
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no need to apologise - its all a learning experience :)
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So from what I put together, the best solution is..........<br />
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1.) Reinstall SBS on the Dell Server, without letting it automatically install Active Directory. <br />
2.) Run DCPromo on the SBS Server. (will this work, doesnt SBS have to be the first DC?)<br />
3.) Transfer all FSMO roles to the SBS Server and demote the Server 2003 Standard machine and its only role can be Terminal Server and file server. <br />
4.) Run Exchange Setup on the SBS Server and configure Exchage. <br />
<br />
Is this correct? Will step 2 actually work? 
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If we dont go the SBS route the problem is he just purchased SBS Server with 25 CALs. My other question is, if we decided to go with a new machine running Windows Server 2003 Standard and purchase Exchange Server seperate, is there anything that Microsoft can do regarding taking the software back? I know this is not normal but can we talk to Microsoft and complain that the company screwed up that ordered it? 
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 A company just called me with this problem that they want me to fix. <br />
<br />
They have currently a Windows Server 2003 Standard machine that is their Domain Controller, file Server, and a 5 CAL Terminal Server. An IT company just set them up with a Dell Server with Windows Small Business Server 2003 for an Exchange Server. &nbsp;The problem is the tech doesnt know what he is doing. I just talked to him on the phone and he said that he just ran the wizard set up on Small Business Server and it installed Active Directory and everything else that SBS does! <br />
<br />
So, my problem, is what is the right way to install Exchange? Couldnt I wipe the SBS Server and reinstall SBS without Active directory and everything else, then run my forest prep and domain prep and the SBS server wouldnt have Active Directory. It would only have Exchange Server and the domain controller would be the Windows Server 2003?
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 A company just called me with this problem that they want me to fix. 

They have currently a Windows Server 2003 Standard machine that is their Domain Controller, file Server, and a 5 CAL Terminal Server. An IT company just set them up with a Dell Server with Windows Small Business Server 2003 for an Exchange Server.  The problem is the tech doesnt know what he is doing. I just talked to him on the phone and he said that he just ran the wizard set up on Small Business Server and it installed Active Directory and everything else that SBS does! 

So, my problem, is what is the right way to install Exchange? Couldnt I wipe the SBS Server and reinstall SBS without Active directory and everything else, then run my forest prep and domain prep and the SBS server wouldnt have Active Directory. It would only have Exchange Server and the domain controller would be the Windows Server 2003?

Windows Server 2003 Standard with Windows Small Business Server 2003 as the Exchange Server

Exchange is the server side of a collaborative application product that is part of the Microsoft Server infrastructure. Exchange's major features include email, calendaring, contacts and tasks, support for mobile and web-based access to information, and support for data storage.

Exchange

Windows Server 2003 was based on Windows XP and was released in four editions: Web, Standard, Enterprise and Datacenter. It also had derivative versions for clusters, storage and Microsoft’s Small Business Server. Important upgrades included integrating Internet Information Services (IIS), improvements to Active Directory (AD) and Group Policy (GP), and the migration to Automated System Recovery (ASR).

Windows Server 2003

Small Business Server (SBS) is a line of server operating systems targeted at small businesses by bundling the operating system with a number of other Microsoft products that would normally need to be purchased or licensed separately. The most notable inclusions are Exchange, SQL Server, SharePoint and ISA/TMG (Microsoft's firewall and proxy server).