I need to run both Exchange 2000 Server and DNS in a domain. Can I combine these roles on one server? What is the advantage or disadvantage of having an Exchange 2000 server act as a DNS server?

You can combine these roles. You might see a minor performance advantage from installing DNS on an Exchange 2000 server because the server can satisfy name-service queries locally.

However, to get best performance and utility from your Windows 2000 DNS servers, you should use Active Directory (AD)—integrated DNS zones. If you create these zones, you'll be running DNS on your domain controllers (DCs), which is perfectly fine. However, Microsoft generally recommends against putting Exchange 2000 on DCs, so you probably won't want to consolidate the two roles. In addition, if you have a production Exchange 2000 server that's working well, be leery of making configuration changes--including adding or removing the DNS service.