Many people want to use one of several OS-level cloning tools on the market to quickly and easily copy a SQL Server installation to other systems. Unfortunately, SQL Server 7.0 doesn't let you easily clone an installation. In fact, SQL Server 7.0 reports an error if you change the server name after SQL Server is installed. Although you can find workarounds for copying SQL Server 7.0 installations, SQL Server 2000 provides a cleaner mechanism for distributing disk images of a SQL Server installation.
When you create a new installation of SQL Server 2000, the installation is marked in the registry as a brand-new installation. Then when you first start SQL Server after installation, SQL Server 2000 verifies that the server name hasn't changed. If the server name has changed, SQL Server simply grabs the new server name and makes an automatic correction to the appropriate registry keys. Note that you can take advantage of this behavior only once; you can't use it to change the Windows server name after you begin using SQL Server. After you've started SQL Server, the installation will no longer be marked as new and SQL Server won't automatically update the server name for you. In that case, you would have to rerun setup, which then updates SQL Server with the new Windows server name. For more information about this topic, see the SQL Server Books Online (BOL) section "Deploying SQL Server After Initial Installation."