I'm setting up a computer network for a small (10-20 people) company. They are currently using a Hosted Exchange service they are totally happy with. Other than that, they are starting from scratch (office doesn't even have furniture yet). They will need some kind of file sharing server set up in their office.

If I set up a machine as a file server and nothing more, users will have three passwords to deal with: local machine, file server, and email.

If I set up a Domain Controller, identities for local machine and file server will be the same. But what about the Hosted Exchange server? Must the users have a separate email password, or is it possible to combine the two? (I realize it might depend on the specific hosting provider, but is it possible?)

If not, it seems like I have these options:

1. Deal with it: users have a separate email password.
2. Host Exchange on the local server: more than they want to manage in-house?
3. Purchase a hosted VPS, make it part of the domain, and host Exchange there. (Or can/should a VPS be a domain controller?)

I realize I have a lot of questions in there. The main one: is there any reason to use a Hosted Exchange service if I'm setting up other Windows services?