I'd wouldn't just re-intall. I'd try to find the problem first. Take a look in the system log. Anything stand out there? When you say "not being able to log on...", specifically how? What is the error on the client machine and what is the error in the respective service log? Does the machine drop off the network completely? Have you verified the server's DNS configuration? What happens if you try managing services with the serveradmin command from the command line?
First, we have purchased a refurb. MacMini to replace our aging imac server, so we have to do some kind of migration, or new setup. This is kinda what I was referring to ... pros and cons of starting over, or migrating.
Second, to answer your q's...
I'm new in the mac server world, so I haven't gotten much out of the logs yet. But I have some suggestions on what to try (debug/verbose service directory logging) so will try next time we have the problems.
The error with server admin goes away with a simple restart of server admin. FYI, I do our server admin/wgm work on the server itself.
The problem with the clients is when a user trys, it says something like "unable to log in at this time... an error ocurred". It's the same error you would get if you didn't "create user home" when setting up a new user, and their home directory doesn't exist. The client refuses to log in. The client system is on the network at all times, a ping running proves it.
Server DNS is off - dns is handled by a router, but fwd/rev dns works with the server fqdn.
I'm assuming that the refurbished MacMini server already has OS X Server (Mountain Lion) installed.
Migrating OD can be done by exporting your users with workgroup manager on the 10.6.8 machine by selecting them and then choose file --> export --> users and importing them using Workgroup Manager 10.8.
I'd migrate first to the 'new' server, test it, and only if it works flawless in your environment -- swap it
After you did this, maybe you can think of another use for your aging iMac? When it meets the requirements, you could also install Mountain Lion and use it as a new workstation, otherwise just use the install disks to install 10.6 and upgrade it to 10.6.8 afterwards.