Server 10.5 Install and DNS

[piersd]

I'm having issues getting 10.5 Server to install and work correctly on my XServes. I have read all the documentation (including the Server Essentials book) and I'm confused.
In order to have a successful install of a Standard config, must DNS services be available from another machine on the network or not? I will be using this Server as a DNS server once its up and running, but how should I configure DNS in the meantime (during initial setup)?
All the documentation says that the Machine must have a resolvable FQDN in order for some services to work, but then never says which services. I have had problems getting even basic APF and Time Machine Backups to work as my users cannot authenticate to the server and it would seem that this all stems from DNS issues during setup...