Active Directory is a special kind of hierarchical database that stores system settings, computer information, user information, application configuration, and a wealth of other information and statistics about your network. In fact, Active Directory is the most important database on your server when this database becomes corrupted, it can prevent your server from booting because Windows can’t find the settings it needs. Choosing the Directory Services Restore Mode option tells Windows to attempt to fix Active Directory — at least enough to let you boot the server. After you boot the server, you can restore any backup you have to fix the problem completely.
You find Active Directory used only on domain controllers. If your server isn’t a domain controller, it doesn’t have Active Directory installed and you should never use this option with it. When you use the Directory Services Restore Mode option, Windows performs the following tasks:
1. The server begins booting as if you had selected a Safe Mode option.
2. The server then performs a check of the hard drives on your system. This check looks for any problems with the hard drive that could have caused the Active Directory corruption (using the ChkDsk utility).
3. After a few more configuration tasks take place, you see a normal login screen. Supply your credentials and you see a Safe Mode screen — not the normal GUI.
4. Use any Active Directory GUI or command line tool to make repairs to Active Directory. You can also restore any backup you made (assuming the backup is available in Safe Mode).
5. After you finish the repairs, type Shutdown /r and press Enter at the command prompt or choose Start -> Shutdown.
When you’re working at the command line, Windows displays a You Are About to be Logged Off dialog box. After about a minute, the server reboots. When working with the GUI shutdown, you see the normal Shut Down Windows dialog box, where you can choose any of the standard shutdown options. You can use Windows Server 2008 in its normal mode at this point and continue any repairs you need to make to Active Directory.
Source of Information : For Dummies Windows Server 2008