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How to setup Windows terminal server?

Currently we are using a terminal server for user remote access. This TS server is 2003 based physical server and the purpose of users to connect is to use published NAV client and other software. Now, due to the resource constraint especially on RAM, we want to setup a new TS VM, can 2008 r2 support. How to setup? I remember few years ago when setting up this 2003 ts, I have to go through few gpo to disable a lot of features. Will setup 2008 based have to go through the same way? Please show step-by-step.

Thanks,
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Excellent, it works