Unlike earlier versions of Windows which used NetBIOS to communicate, Active Directory is fully integrated with DNS and TCP/IP. However, to be fully functional, the DNS server must support SRV Records. Windows 2000 workstations can still function using WINS to locate the servers, but Active Directory will not function properly without a DNS server that supports SRV.
Active Directory allows administrators to assign policies to workstations, deploy programs to many computers, and apply critical updates to an entire organization. Active Directory also stores information about its users and can act similar to a phone book. This allows all of the information and computer settings about an organization to be stored in a central, organized database.