alexsan: I tried it the easy way first as you described. I think it's kerberos security related; Win server doesn't usually just let anything join the domain that easy as the instructions say UNLESS it's some old NT4 server.
I just formated-recreated the USB stick drive; trying to start over now.
I'm using an Intel 875pbz P4 2.4 ghz, 1 gb ram, 2 ide 160 G seagates and it's a pristine custom box with bios set perfect for the SAN box.
It's getting that San box w/ Dss lite to authenticate and join the domain per the instruction manual.
My goal is to boot from this box as a target 1st then add san nas just for experience.
Tried NAS cuz i ve done a hundred of them.
I think I got what i paid for (free) as usual 2nd install just sits and red circle turns, no flashing lights on usb or HD's. not good.