Source: http://www.computerperformance.co.uk/w2k3/utilities/adsi_edit_more.htm

Example 4 – Changing Forest and Domain Function Level

Set Functional Levels Manually
It is possible as a last resort modify the current domain and forest functional level settings with ADSI Edit. When you modify the attributes manually, it is best to target the FSMO authoritative for the increase as the change is actually written to the authoritative FSMO then replicated.

Forest Level Setting

The attribute that you want is: msDS-Behavior-Version on the CN=Partitions, CN=Configurations, DC=ForestRootDom, DC=tld object.
Value of 0 or not set=mixed level forest
Value of 1=Windows Server 2003 interim forest level
Value of 2=Windows Server 2003 forest level

Note When you increase the msDS-Behavior-Version attribute from 0 to 1, you receive the following error message, just ignore it!
Illegal modify operation. Some aspect of the modification is not permitted. Click OK to continue.

To check that your change has worked, refresh the attribute list and check the current setting.

Domain Functional Level Setting
The attribute is msDS-Behavior-Version on the NC head root of each domain DC=Mydomain, DC=ForestRootDom, DC=tld object.
Value of 0 or not set=mixed level domain
Value of 1=Windows Server 2003 domain level
Value of 2=Windows Server 2003 domain level