The bad part of dynamic disks is if you screw up a partition royally or a disk in a spanned dynamic partition goes down your data is either irreparably gone or very hard to recover depending on the situation. I won't use dynamic disks after I once schmoed a partition over two drives and had a hell of a time restoring the drive-many dll's and boot.ini, ntdetect, etc. were all corrupted.
If you do use it, I'd agree to keep the OS on another physical disk.