Security Breached - New SBS Installation

Our 2003 SBS Security has been breached with some "undesirables" remotely
logging in, and changing Policies and Permissions and effectively disrupting
the Server.
Fortunately the server had not long been setup, and therefore wasn't actually
'in service'.
(This all started when we had the web server and remote connections up and
running, using the in built wizards) The Router's firewall was also remotely
disabled, so a "fun time" was had by all!!
Anyhow, an interesting experience, and lessons to be learnt.
The question is however, we had a couple of non important client w\stations
joined to the domain, and am wondering if by re installing the server once
again, will this have a negative impact on the client side?
Apart from the obvious sharing\data links to the server (of which nothing
set up)
We've noticed that by joining the clients to the domain through the SBS
wizard, all local profiles\folders from the clients were successfully
imported over.
Consequently if they log in locally, their original local profiles no longer
exist, and are presented with a "Clean" Desktop.
Before we take the server offline for reinstallation, should we set the
clients back to a Workgroup to avoid complications later when trying to log
back on to a non existent domain, and in which case, does this restore the
local profiles and personal folders to the local machine?
There are currently extra user directories in 'Documents and Settings' that
were setup when joining the domain I.E 'user \ user. user \ user. Domain' -
Presumably these will remain.

Any help\guidance would be appreciated.
Tks guys


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