As per http://www.sql-server-performance.com/faq/domain_controller_performance_p1.aspx

1.

While SQL Server can run on a domain controller, it is not recommended if you are seeking the best performance. For best performance of SQL Server, the server should be dedicated to SQL Server, and not shared with other functions, such as a domain controller or a file server.

It is hard to tune servers that run multiple application, as different application may require mutually exclusive configurations.

2.

Another possible issue with running SQL Server on a domain controller is security. With both running on the same physical server, should one of them be compromised, then is is possible that it might be easier to compromise the other one also.

MJ