Similar to a Kerberos realm, a Windows domain (while not a DNS domain, but in Windows 2000 it uses DNS - confused yet?), a domain provides a name space, trust relationships, centralised account/password administration and directory functions.

This is a MicrosoftCorporation-ism. See ActiveDirectory.

If you want your Linux machine to act as a Windows NT domain controller, use Samba 2.2 (and see SambaAsPDC); if you want to act as a Windows 2000 ActiveDirectory doman controller, use Samba 3.0 (and see Samba3LDAP).