The Active Directory is currently part of the DNN Core. I'm working on pulling it out of the core into its own project so that it can become a proper provider.

I have been adding what I would refer to as a fix with a check to automatically create the users when logging into the site.

I know this works in the 3.x series and I have implemented in 4.5.1, however I am having some issues with the provider not authenticating properly, but that is not my enhancements and is not a topic for this post. 

However, here is the link to the thread that was started a while ago about it: http://www.dotnetnuke.com/Community/Forums/tabid/795/mid/2108/groupid/36/Default.aspx

There is also sample code there.  It has also been logged as an enhancement via Gemini.

Have you had or heard of negative issues using this fix?

We upgraded from 3.2.2 of DNN to 3.3.7 and we lost the sync of roles and groups.  Worked fine before, with a few bumps when the system was up for a long time, but it did sync the roles.  Need to that work again because we have 100+ roles and over 1800 users on our intranet.