If the proper trusts are in place - are there any pitfalls to doing this?
Parent company wants us to use service account from their domain (without moving the server to the domain).
Help would be appreciated.:-)
If both domains are on the same forest, I think you need a two way trust between both domains. Otherwise, some resources won't be able to reach the SQL box or viceversa, as the SQL server box is attached to a different domain.
As long as your web servers or applications on the different domain can reach or see the SQL server, you should be fine. Assuming, of course, required network ports, etc, are not closed or filtered.