DHCP server

Using Windows or another dedicated appliance as a DHCP server on your internal network means having a local cache of DNS queries that you make, this means that your browser will resolve the ip address of a website faster and it take the load off your internet service providers DNS servers.  If you are on a large network with lots of users (25+) you would want a dedicated DNS server on your LAN to save your internet connections bandwidth for other tasks.

Also If you run a Windows Domain Controller you would need to setup a DNS server on that domain for everything to work correctly.

Thanks for the quick response!  I have a domain so of course we are running DNS on the DC.  Currently the firewall is the DHCP server.  Is there any advantage to switching the DHCP server to our Windows server or keep it the way it is?

Assuming we are talking about DHCP only here, having it on your server would be the best bet, especially if you are running Active Directory.  The advantage of having it on the server is that it can replicate to your servers DNS settings, making the machines easier to find by name on the network.  Active Directory is highly dependent on DNS so having DHCP tied into the DNS automatically is a large benefit.

I can't think of other pro/con difference other than the above.

dhcp server has nothing to do with a cache of dns queries, that is only the case when you have a local dns server. That said, a dhcp server is very handy. You can configure it to assign a range of ip's that you choose. You can do this based on static leases ( by assigning an ip to a certain mac address) or by dynamic leases wich have a server definable lease time. This way you won't have to walk to every client to change ip's or other settings. You can tell it to configure the dns server to use for all clients and many other options, so you don't have to walk over to every machine to do so. Generally dhcp server on windows or linux allow a wider range of configuration options then the very simple hardware firewalls do. Ofcourse there are more advanced hardware firewalls where this is not nessecarily the case.

i second dpait on the integration being a big pro (if you intent to use it, we don't).