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MS Server upgrade options - best route to follow


We need to upgrade our domain controller server asap as the hardware seems to be failing and it is 8 years old.  Currently we are set up with SBS 2003 as the domain controller, a Windows server 2008 for our database server, and a Terminal Server 2008.  Most clients are XP, and office 2003.

I just wanted some advice on the best software upgrade.  Would SBS 2008 be good enough to be the DC and work with the other servers or is it better to get another windows server 2008 or 10 plus exchange 2008/10.  Would we need to upgrade our client software?  of course purchase cost and licensing cost is an important consideration

Any tips appreciated.

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Darius Ghassem
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If you currently are using SBS moving to another SBS version is a good idea unless you are expecting to grow to more the 75 users or you want to move to Windows 2008 Server. Really depends on what you are comfortable with and would like to do.
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Hi Dariusq

Thanks for the advice. We will have under 75 users but just to clarify some differences.

Is there a cost advantage with SBS over Server 2008 and Exchange separately?
Will all our XP and Office / outlook2003 machines work with 2008 products and later exchanges.
Is it more work to configure clients to connect on Server 2008 as opposed to SBS.

Is there really any advantage to go for 2008 server over SBS for a small company.

Our IT company informed us the whole upgrade paths are quite complex, outlook 2003 may not work with exchange 2010, every client will have to be manually connected to the new server which will take a lot of work.  SBS might not be a good domain controller over 2008 servers with regards to AD / GPO etc.  Their suggestion would be to just virtualise the old sever on new hardware as easiest and cheapest.

Any light you could throw on my points I would be extremely grateful for.

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Darius Ghassem
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Thank you very much for all your advice.  really appreciated.