In order to setup SharePoint without AD, you need to run following PowerShell command on Management Shell after installing SharePoint on your server, but before running Config Wizard: (we don’t want to run this SP farm in stand-alone mode!)

1. New-SPConfigurationDatabase

SYNOPSIS
    Creates a new configuration database.

SYNTAX
    New-SPConfigurationDatabase [-DatabaseName] <String> [-DatabaseServer] <String> [[-DirectoryDomain] <String>] [[-DirectoryOrganizationUnit] <String>]
    [[-AdministrationContentDatabaseName] <String>] [[-DatabaseCredentials] <PSCredential>] [-FarmCredentials] <PSCredential> [-Passphrase] <SecureString>
     [-AssignmentCollection <SPAssignmentCollection>] [<CommonParameters>]

DESCRIPTION
    The New-SPConfigurationDatabase cmdlet creates a new configuration database on the specified database server. This is the central database for a new SharePoint farm.

    For permissions and the most current information about Windows PowerShell for SharePoint Products, see the online documentation (http://go.microsoft.com/fwlink/?LinkId=163185).

RELATED LINKS
    Backup-SPConfigurationDatabase
    Disconnect-SPConfigurationDatabase
    Connect-SPConfigurationDatabase
    Remove-SPConfigurationDatabase

REMARKS
    To see the examples, type: "get-help New-SPConfigurationDatabase -examples".
    For more information, type: "get-help New-SPConfigurationDatabase -detailed".
    For technical information, type: "get-help New-SPConfigurationDatabase -full".

NOTE: Use –AdministrationContentDatabaseName switch to pass the name of Admin database you want instead of GUID-based name it automatically creates.

Hence, one can pretty much easily control Admin, Config, and Content database names at the time of farm creation. If creating new farm, you can also delete and re-provision any service databases automatically created, from UI, to decide what database names you want.

2. Run SharePoint Configuration Wizard, and you’ll following as already added to farm. Select do not discconect from farm, and proceed…

Select the port, and authentication (NTLM in my case). Click next, and wizard will complete the remaining steps of provisioning, including creation of Central Admin Web App on the desired port.

Once successful, it will open the Central Admin site and ask you to run Farm Config Wizard. I chose to skip and do things manually, to remain in control of what is happening on the farm. Like creating web-app for site collections, creating the very first site collection, and any other service applications.

I needed this to create a public-facing installation of SharePoint Foundation RTM on a server which didn’t have AD. Now I am going to setup FBA, and possibly Live ID Auth as well. I will be also setting up RBS, and multi-tenancy on this farm ,and would post any notes, and findings here…

--Sharad