It can exist without MS DNS on the same server i.e you don't have to install it when Windows offers too during setup, but it will require a compatible DNS server somewhere in your domain.
Another MS server with DNS installed (Windows 2000 or above) or most later versions of BIND are compatible.
Basically no. AD needs DNS to work. It works best with MS 2000 and 2003 DNS services but as per bofhrevenge2's reply, it can be any BIND compatitble DNS server.
(However if you are setting up a Windows network, you get better features and intergration with a Windows DNS server on a Windows AD network.)
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