VM Host needs to join the domain in Virtual Machine

I'm assuming it's a sole domain controller?

Whilst it might let you try, I doubt that it will work, even if it did, I fail to see the point. The domain member (not the domain controller) will never read computer policies at start up, as there will never be a domain controller available.

I'd be tempted to ask what you were trying to achieve, and depending upon your response, maybe advise you to install the Windows 2008 R2 data centre server virtualised, or set up a second domain controller elsewhere.

The problem with this is that the DC needs to be running at boot in order for members to connect to it, and workstations still require a restart when they join a domain. You're never going to end up with reliable, useful results from doing something like this.

You could temporaily move the VM to a different machine to be able to add the host box, then once added move it back.

I wouldn't recommend this solution though as it will most likely cause problems every time you reboot the host box. When it starts back up it won't have a DC to authenticate against until the guest VM is able to boot several minutes later.