Microsoft Knowledge Base Article 247811 contains the following summary:

This article describes the mechanism used by Windows to locate a domain controller in a Windows-based domain. This article details the process of locating a domain by its DNS-style name and its flat-style (NetBIOS) name. The flat-style name is used for backward compatibility. In all other cases, DNS-style names should be used as a matter of policy. This article also addresses troubleshooting the domain controller location process.