If you are upgrading from BDD 2007 (any version) to MDT 2008, the instructions are covered in the "Getting Started Guide" included with MDT 2008. So I won't repeat that discussion here. I want to focus on the new scenario, upgrading from the original Microsoft Deployment to the new Microsoft Deployment Toolkit 2008. Here are the basic steps needed when using Zero Touch with SMS 2003:
MDT 2008 does not require Windows AIK 1.1 if you are using only Windows Vista RTM or Windows XP; Windows AIK 1.0 is fine for these. But if you are using Windows Vista SP1, you need to upgrade to Windows AIK 1.1. (If you don't, as soon as you add a Windows Vista SP1 image, you'll start seeing warning dialogs. They won't go away until you do upgrade.) The steps needed to upgrade to Windows AIK 1.1 are:
Note that the steps above are very similar to those used for Lite Touch (see the previous post at http://blogs.technet.com/mniehaus/archive/2008/03/21/upgrading-to-microsoft-deployment-toolkit-mdt-2008-lite-touch.aspx), not surprising since most of the MDT scripts and tools are shared between these two deployment methods.
That should do it. Now you're ready to start with Windows Vista SP1 :-) (SMS 2003 doesn't officially support deploying server operating systems, so I've left Windows Server 2008 out of the discussion.)