I am trying to upgrade a network that currently has a SBS 2003 Server as it's Domain Controller (DC). I would like to switch over to a Windows Server 2008 R2 DC.
I believe (correct me if I'm wrong) that the first step should be to join the new DC to the existing domain.
From there, I am confused as to what I should do. How can I change the domain name to company.com from company.local without causing problems for all of the existing desktops?
Yes, you are correct, the first step would be to add a second domain controller. After that, you have some licensing considerations. If you want to keep/upgrade your licenses for Exchange and SQL you will have to download and follow the Transition Pack for SBS from Microsoft. If not, you can seize the FSMO roles and shut down your SBS box.
You have no reason to change the domain name during this process, and changing to a .COM is never recommended.
Why you would want to change your domain name is beyond me, but there are always legitimate reasons. If you just want to change from .local to .com, I recommend that you look into your reasons. If you need to change the name for political reasons, so be it. A .com name may be used, but be careful. You really don't want to use your company's domain name. Use a sub-domain. Or, register another domain name and only use it for internal naming purposes.
That being said, here's the process. You don't want to join the new server to the old domain. When you do that, you lose the ability to chose a new domain name. Setup the new server using the domain name you desire. When that's done, install ADMT on either server (you can install it on SBS2008 if that's what you're using, but it's a pain). Use ADMT to migrate all user and computer accounts over to the new 2008 domain.
It's a lot more work than a computer rename. You must figure out if it's really worth it. It may be more trouble than it's worth.
Check out www.sbsmigration.com. It lays out the joining of a temp DC and of moving around the FSMO roles.
BTW SBS 2011 based on Win2k8 r2 will be rtming in December. If you want to keep a SBS solution, check out the announcements on http://blogs.technet.com/sbs