Forgive some of the explanation, this is new to me, and I did some of this stuff backwards.
As part of what my company does (distributed control) we are to supply a new subnet to a customer complete with a W2000 domain controller. The new subnet is to add to an existing network with an existing domain controller.
For the purposes of testing, I built the existing server x.x.x.17 on network x.x.x.0 and promoted it to DC. DNS Server is itself.
There is a single client on the x.x.x.0 network for test purposes (I need it there anyway). It is logged into the domain.
There are two clients on our new subnet x.x.y.0. I created a lmhosts file on these PCs which looks like this:
and they both connect and all is well.
Now I have created my new server and promoted it to domain controller (added to existing domain). I got a bit twisted here, but I have done the following to things:
1. DNS Server is the existing domain controller (x.x.x.17)
2. I created another identical lmhosts file to the above.
Having done this, it works and I have two domain controllers, and three clients still logged into the existing DC.
The clients do not have primary or secondary DNS configured.

The question is, how do I get clients to log onto the closest running domain controller?
If I keep the existing lmhosts I can't connect to the local DC if the remote is inaccessible.
If I remove it I can connect to the local DC but doubt I will reach the remote DC if I have to.

Also, how can I prove that the two DCs are working correctly together?

Thanks in advance,

ps. I'm taking a week off for Christmas, but I'll be back!!