Interesting - what about Server08R2? That's the one I'm using. Unfortuantly my current server is live and not in a position to run this sort of test. I wanted to set up my farm that way initially buy I'm pretty sure I ran into problems, and I vaguely recall one of the problems being Windows complaining at what I was trying to do. I now have a seperate physical box for the PDC and 2 virtualised Domain Controllers.
Not sure about R2 as I have not tried this on that platform but unless the DC role restriction was added in R2 it should work, they may have purposfully crippled it though just to spite me :)
I'm running our Hyper-V servers on three 2008 R2 clustered servers and they are running fine.
The only problems I'm finding with one of the virtual servers (64 bit 2008) running SIMS - it seems a bit slow for users logging on to sims (they seem to take about 30 secs!!!)
I'm running a separate 10TB SAN for the hyper-v disks with 2x10GB iSCSI bonded.
Hyper-V clients are a mixture of 2008 R2, 2008, 2003 (only needed for crap old apps like Successmaker) servers
As clustering requires a domain, I ended up creating one domain purely for the hyper-v cluster network and a second domain for all the rest of the physical and virtual servers.
As to people saying that they will only use VMWare - why???? Hyper-V is stable, an industry standard and a hell of a lot cheaper than VMWare - plus Hyper-V V2 live migration works great - only offline for two pings
Hyper-V works great, we use it. We have several VMs setup on it. We plan to use a second server for failover clustering.
As for the DC issue. You can virtualize a DC. When virtualizing a DC you need to do it offline, we've done it a few times here without any problems.