Easiest way to get an Active Directory server for testing

Your going to need a server installation (Windows 2003/2008/2008R2) to install Active directory.

Generally the easiest way to do this in a test/dev enviroment is to install the server OS in a VM and setup a domain inside of that. It's really not that hard if you are just looking to run a very small domain for people to test auth against.

You could do it in a VM using Virtual Box, your host machine hardware will determine how well it performs. You will also need a license to install. It will NOT run locally on Win7, you need a Server OS.

Samba, the free and very popular SMB/CIFS file server, has a built in Active Directory and LDAP server. You're best off running it in a Linux VM of some sort (I prefer VirtualBox for simple testing applications). Be sure to see the installation section for the requirements.