Need help - SBS and Standard

[realized]

In our office i have a windows 2003 SBS machine and everything runs perfectly, The office doens't even have space for the 75 or so user limit there is in SBS so upgrading this os would never become an issue ...

Another office has since closed down and now i have their windows 2003 Standard machine.

We are about to implemennt a software application which requires msde/sql, and a file server. Our current sbs machine while runs flawlessly, i would rather put the new application on its own standalone server.

My question is this.

Currently:

SBS = DNS(server), IIS (internal use only), DHCP(server), MSDE (5 databases), File server (that is used, not one thats idle), Special software that logs phone calls on our Toshiba Strata, WUSUS.

What i am considering:

SBS stays same.

Standard gets demoted to a domain member(not sure if thats the term), and runs our new iis and file serving application.

What would you guys do?

Yes i have licenses for both machines... i.e if moving to standard as my primary domain control was a smart move, i wouldn't have an issue with licenses on my 2003 standard box.