By definition, a forest is a group of one or more active directory trees that trust each other and share common schema, configuration, and global catalog.
To create windows 2003 active directory forest, follow these steps:
1. Click Start and Run
2. Type dcpromo in the command prompt box and click ok
3. On the Domain Controller window, choose “Domain Controller for a new domain” and click next.
4. Create Tree or Child Domain window, choose “Create a new domain tree” and click next.
5. Create or Join a forest window, choose “Create a new forest of a domain tree” and click next.
6. Type the “Full DNS Name” for your new domain name. You may setup your DNS prior installing Active Directory or you may setup at same time.
7. Setup your NetBIOS, keep the auto generated NetBIOS unless you real need to change it and other existing NetBIOS. NetBIOS is legacy windows name resolution. Click Next.
8. Choose the location of your Active Directory Database and Log File. Storing these files to separate hard disk is recommended. Click Next.
9. Choose the location of Sysvol folder. Sysvol stores domains public files and the contents are replicated to all domain controllers in the domain. Must be NTFS folder. Click Next.
10. If you did not configure the DSN, choose to configure it and run the DSN wizard. Configuring your DNS prior Active Directory installation is recommended.
11. Type the Active Directory Restore Mode password. Make sure to keep this password in secure location. You will need to access Active Directory Access Restore Mode. Click Next.
12. Review the summary and verify the domain, database location, and the sysvol location.
13. Click yes to restart the computer when prompted.