I was chatting to Stefan a bit yesterday, and he mentioned being on the lookout for a small DNS server that can also do DHCP, so I recommended an excellent tool called dnsmasq, which is
a lightweight, easy to configure DNS forwarder and DHCP server. It is designed to provide DNS and, optionally, DHCP, to a small network. It can serve the names of local machines which are not in the global DNS. The DHCP server integrates with the DNS server and allows machines with DHCP-allocated addresses to appear in the DNS with names configured either in each host or in a central configuration file. Dnsmasq supports static and dynamic DHCP leases and BOOTP/TFTP/PXE for network booting of diskless machines.
He seems to have been successful with it. ;-) I devoted a whole chapter to dnsmasq in my book Alternative DNS Servers because I also think dnsmasq is ideally suited to quite a number of installations, even medium- sized ones.