Go to active directory users and computers, right domain and select raise domain functional level

Select windows server 2003 functional level.

Click raise button.

Click ok.

Click ok.

Click close button.............

Forest Functional Level

Go to administrative tool- Active directory domains and trusts.

Right click active directory domains and trusts.

Select the windows server 2003 functional level.

Click ok.
Click ok
Click ok button...................