Animal Magic (12/21/2007)
It is taken from the local security policy, which by default will be taken from the settings on the DC. You dont actually set these values within SQL.
You're correct in saying it's defined in the local security policy. But you are wrong in saying that this policy is taken from the Domain Controller. SQL login are treated like local accounts and only the local policy applies to them. Domain policies can overrule local policies for Domain Users, but not for local accounts or SQL accounts.