I'm sure that once you have your Pi up and running it won't take you very long to get to grips with what you want to do. It seems that there's a fantastic amount of information and support out there. It's going to be a learning curve for me too but I'm really looking forward to it.
Running a DNS server isn't particularly complicated. If you just want one to answer DNS queries from your local computers that's very straightforward. It only gets a little more complicated when you want to use it as an external facing nameserver running DNS zones for domains you control. Even then it's just a matter of making sure the syntax for the zone files is correct. You'll be fine.
You're already being more adventurous than I am by running wi-fi on it. I'll just be using mine hardwired.
As for the wife upgrade, might I suggest an upgrade from 1.0 to 1.1, which is a bug fix, rather than trying the leap to 2.0b in one go?
Best of luck!