If you ever get the following message:
The server forwarders cannot be updated.
A zone configuration problem occurred.
When setting up conditional forwarders in Windows 2003 R2 DNS Server then more then likely its because the zone already exists as a stub zone.
In my case I tried to add xyz.local and got this error message each time. My first move was to check if there was a xyz.local stub zone and sure enough there was NOT. After some more checking I noticed there was a “local” stub zone.
Make sure to check for the root level as a stub zone, I bet you will find that is your issue.
Hope it helps!
-Eric