Running an Active Directory Primary Domain Controller as a virtual machine?

Should the Active Directory PDC always be a physical machine or would it be okay to run it in a VM? What are the implications/trade offs/gotchas?

As a corollary to this, what about running a physical PDC that is also a Hyper-V host? Any implications there (especially for guest VM's that may also be SQL or Exchange Servers?)

Note: Performance implications are secondary. My main concern is gotchas.

Solution 1:

If you're talking about the domain controller holding the PDC Emulator FSMO role I would strongly recommend running it on physical hardware. It's the master time sync source for the entire domain (and the entire forest, if in the forest root domain of a multi-domain forest). Clocks on virtual machines are notorious for drifting and time sync is pretty important since Active Directory bases authentication on Kerberos, which, in turn, has time sensitivity built-in (albeit you can configure it to be more "sloppy" if you really want to).

Solution 2:

I tend to error on the side of caution, but I have HyperV servers running DCs all the time... The hypervisor is joined to the domain for convenience, but that is all...