From the Advanced Server Admin for OS X Server v.10.6:
You must have a fully qualified domain name for each server’s IP addess in the DNS system. The DNS zone must have the reverse-lookup record for the name and address pair. Not having a stable, functioning DNS system with reverse lookup leads to service failures and unexpected behaviors.
I was recently bit by this requirement as my internal network doesn't have an internal DNS server. As a result, various applications and services (User Management in particular), hosted on my XServe have experienced degraded performance. My question is, besides deploying my own DNS server (dnsmasq or bind9) is there any other way to provide a FQDN (Fully Qualified Domain Name) for my X Serve?
UPDATE
Used the X Serve as its own DNS host, worked like a charm with very little configuration.