GPO on Window 2003 & 2008

I have two DC Window 2003 and Window 2008.

Password Policy is deployed on the domain level and all the servers are grouped under a OU "servers" created under the domain.

The servers have the other password policy which is difference from the password policy on domain level.  I was told that password policy should be deployed on the domain level. Does it mean that I can't create another password policy and bind to the server ou ? How should I handle this situation ?

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What is the Forest and Domain Functional Level.

You could try Fine Grained Password Policy.
Sanjay SantokiCommented:

Password policy is entirely depend upon the forest and domain function level. Both should be at least set to windows 2008 which would not be possible since one of the domain controller is on windows 2003. To overcome this situation you have to replace windows 2003 with windows 2008 and need to raise forest & domain functional level.

Sanjay Santoki
AXISHKAuthor Commented:
Under Window 2003 functional level, I can't create another password policy at OU level, correct ?

Can I filter out the password policy binded on the domain level ? ie, this GPO will not apply to the server OU ?
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AXISHKAuthor Commented:
I have blocked the inheritance on 'Domain Controllers' and 'Servers' OU where the server and controllers are located. Will the password policy be blocked on these two OUs ?

Password policies ONLY work at the domain level. Pasword policies will not work on an OU.
AXISHKAuthor Commented:
Understood. But we don't want the policy to affect servers OU. Can I simply block the inheritance on this OU ?

Inaddition, if I enable "Password never expires" on some accounts, will it still affect by the Password Policy on the domain level ?  

Password never expires negates the domain policy for username password (to include the complexity and duration of the password). So, if you set this for your domain admin account, the domain password policy will be negated for that domain admin account.
AXISHKAuthor Commented:
Last check, can I block password policy by enabling "Password never expires" on a particular OU ?

It doesn't block the policy, but it overrides the policy, if that makes sense. The policy still exists for the domain. The user account with "password never expires" ignores the domain password policy. Remember the password policy is set on the computer side for ALL users of the computers in the domain, but "Password Never Expires" negates it for that specific user account.
AXISHKAuthor Commented:
Sorry,  to clarify my understanding,

If I block the inheritance on server OU, the password policy linked in Domain level will not take affect on it, correct ?

Tks again.
That should work.. Using password never expires grants you more granular control on the domain server.

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AXISHKAuthor Commented:
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Windows Server 2003

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