If your Win2003 server is running Active Directory, you must use MS AD DNS. Active directory can't function without MS AD DNS (BIND guru's can make BIND work I hear, but thats another discussion). In this case, your DNS server IP settings will be itself, or if you have multiple AD servers, use a different AD DNS server.
Use SME as your forwarding server for your AD DNS server. Add a static host (a) record for SME using SME's Lan IP address. This will allow you to ping it by using the simple host name from any PC using your AD DNS.
ryan