2008R2 is 64bit only so if you are running 2003 32bit you will be doing fresh installs. This is far easier if you have another piece of hardware to use.
For me it was something like this: (My setup has a small dedicated domain controller that has all of the domain FSMO roles assigned it. IE it is dedicated to its task)
Install 2k8r2 on fresh hardware (I used an ESXi VM)
On the 2k3 machines do the /forestprep and /domainprep using adprep on the current FSMO roles
Join the 2008R2 machine as a domain controller.
Transfer the roles.
Leave the domain and forest levels at 2003.
You then need to follow the migration process (documented heavily on MS's site) to migrate the features and roles off the 2k3 machines. IE DHCP / Shares / DFS-R / Certificate services etc
Once the 2003 server(s) is(are) ready to be decommissioned, remove it(them) from AD. If you want to reuse the hardware, format and install 2k8r2.
"rinse and repeat as needed"
Once all the 2k3 Domain controllers are decommissioned, Upgrade the forest and domain to 2008R2.
Obviously there is a lot of little steps I left out. I just completed this for the "main servers." I am still working on some of the 'scraps.'