Hi there,
I’ve received quite a few queries on this subject recently so I believe this might be of interest :)
When activating Windows 7 through KMS, there are 3 “moving targets” you need to consider:
Between Windows Vista / Server 2008 and Windows 7 / Server 2008 R2, the KMS activation protocol was changed slightly and updated from Version 1.1 to 1.2. That means that the KMS host needs to be updated to support the license keys for Windows 7 / Server 2008 R2. You have 3 basic options:
Now that your KMS host is up to date (by the way, even if it isn’t explicitly noted, a reboot is usually required for those updates to actually come into effect), you need to install the right product key on your KMS host to enable it to activate your computers. KMS keys are downwards compatible, both in family and generation, meaning:
(Full details are here: http://technet.microsoft.com/en-us/library/dd878528.aspx)
Regarding DNS, if all is registered correctly, then this command should find your KMS server when executed from your clients:
nslookup -type=all _vlmcs._tcp
If not, please refer to the technet link above :)