I'm a developer, not a server admin, so please bear with me!

I've been tasked with checking the installation of some software on a Windows Server 2008 R2 machine in the cloud, within two scenarios:

1. There is no domain, the software will use local users and groups for authentication
2. There is a domain, the software will use domain users and groups for authentication

I've done part 1, but I'm puzzled about part 2.

I've just installed the Active Directory Domain Services role on the server, so now I have a domain of one computer. When I look in Active Directory Users and Computers, I see all my original local users and groups. Have they now been 'promoted' to domain users? Or do I not have any domain users yet? Is there a way I can tell the difference between domain users and local users now?

Thanks