I am working on an SBS2011 setup.
I note that I could raise the Domain and Forest Functional Level to Server 2008 R2 (from Server 2003).
Doing so, I would gain access to some new AD functionality, including AD Recyle Bin which seems like a good move.
I do not have any servers in the domain that are less than Server 2008 R2 and I cannot imagine any scenario where there ever will be. If any new servers get added, they will almost certainly be Server 2012 R2 (or later).
There are a mix of clients though - including a couple of XP Pro SP2 machines that are attached to machinery and we have not yet been able to confirm that we can upgrade those.
All other client machines are Win7 Pro / Win 7 Ultimate with a mix of 32bit and 64bit machines in there, plus there are the normal mix of printers / photocopiers etc.
Some of the line-of-business client software is 32bit and there is no 64bit version available.
Is there any reason why I should not raise the functional level to Server 2008 R2?