Local System Account or Domain User Account

One of the first questions the SQL 2005 Dev Ed pops up with is this one: Local System Account or Domain User Account, for the service programs. What are the ramifications of choosing one over the other?

I tried an installation using the local system account and I was unable to copy a database from a SQL2000 instance on another server to my new local instance - I figure the cryptic error message I was getting refering to an inability to login to DOMAIN\MACHINENAME$ was coming from the other server? (Especially since I made DOMAIN\MACHINENAME$ a local sysadmin and it made no difference.

Thanks,
David

Use the account "NT AUTHORITY\SYSTEM" for local system account.