When creating a DFS namespace, the administrator requires local Administrator group access on each of the servers hosting the namespace, and if a domain namespace is selected, the administrator also requires domain-level permissions because the domain name space information is stored in Active Directory.
A DFS namespace root requires a file share. When the DFS root is created, the name can be matched to an existing file share name or a custom name can be selected. The wizard searches the specified server for an existing file share matching the DFS root name; if it does not locate one, the wizard can create the share as part of the process. As a best practice, the file share should be created and have shared and NTFS permissions configured prior to the DFS namespace creation. One thing to keep in mind, though, is that the share name must match the DFS namespace name. Reconfiguring the NTFS permission will help simplify troubleshooting and administration of the namespace.
Before attempting to create a new DFS namespace, if the DFS services have just been installed, ensure that the DFS services are running. In addition, for the DFS Management console to appear in Server Manager, all instances of Server Manager might have to be closed and reopened before following the proceeding steps.
To create a DFS namespace and root, follow these steps:
1. Log on to the Windows Server 2008 R2 system with an account with local server administrator privileges. If a domain DFS namespace and root will be created, ensure that the account has the necessary permissions to the DFS-Configuration container in Active Directory.
2. Pre-create the share and set share and NTFS permissions on the servers and shares that will host the DFS namespace root.
3. Click Start, click All Programs, click Administrative Tools, and select DFS Management.
4. Select the Namespaces node, and in the Actions pane, click on the New Namespace link.
5. When the New Namespace Wizard opens, type in the name of the server that will host the namespace, and click Next.
6. On the Namespace Name and Settings page, type in the name of the share previously created, and click Next.
7. A pop-up window opens, asking whether the existing share should be used. Click Yes to use the previously configured share.
8. On the Namespace Type page, to create a domain-based namespace, select the appropriate option button and check the Enable Windows Server 2008 Mode check box to enable scalability and allow for access-based enumeration within the namespace.
9. On the Review Settings and Create Namespace page, review the namespace settings and if everything looks correct, click Create to start the namespace creation.
10. On the Confirmation page, if the result status is reported as a success, click Close to complete the process. If the creation failed, select the Errors tab to review the issues, repair the problems, and attempt the namespace creation again.
The initial DFS root name must match the name of the file share created previously. If the share does not exist, the wizard will prompt you to create a file share from an existing folder or a new folder. Although the wizard can simplify the process by automating this task, it does not provide a method of configuring NTFS permissions.
Source of Information : Sams - Windows Server 2008 R2 Unleashed (2010)