Don't get me wrong, but ... why are you posting this, here ? The wiki might have room for that sort of guide, though you fail to mention a motivation for what you do.
If all you wanted were domains of the form
You do not need to explicitly delegate the authority for something.example.com to another nameserver; it's perfectly valid for the A records to be in the example.com zone (i.e. here.something IN A 127.0.0.X).
You should also probably mention that your example IPs are all just that, and in the local ip space in your example.
Last, but not least, a minor style point :
WWW.DOMAIN.COM. CNAME DOMAIN.COM.
WWW.EXE.DOMAIN.COM. CNAME EXE.DOMAIN.COM.
That's bad form and should be avoided unless absolutely necessary (for instance if the name you point to sits in a different zone and you personally have no control over that other zone and the A records therein). CNAMEs are, at best, an extra lookup. They also carry some semantic salt though, which you may or may not want (for instance, in the above if you define an MX record for example.com, the CNAME will essentially declare one for www.example.com as well). A plain old A-record would do (i.e. www.domain.com. A 127.0.0.1) instead of the CNAME, be faster on your visitors, and not necessarily incurr other interesting side-effects.
Speaking of MX records ...
DOMAIN.COM. MX 0 127.0.0.1
mail.DOMAIN.COM. MX 0 127.0.0.1
Yeah. no. Another bad form. Why define MXs for two different subdomains ? (the second line in there is only useful if you want an explicit @mail.domain.com email host). If you want more control over the IP you could do
DOMAIN.COM. MX 0 mail.domain.com
mail.domain.com. A 127.0.0.1
It's a nit, but this one is a wee bit more elegant. You don't actually lead anybody to believe that there is a @mail.domain.com email domain that way (although if people address mail to @mail.domain.com, most SMTP relays will use the A record in absence an explicit MX).
You mention glue :
NS1.DOMAIN.COM. A 127.0.0.2 // for glue
NS1.DOMAIN.COM. A 127.0.0.3 // for glue
Note that this is not glue. You mention this as part of the parent zone file, i.e. the DOMAIN.COM zone. In there this is not glue at all. It would be glue in the .COM name server. In this case it's just a plain old A-record without any special powers (though you are in deep **** if these A records do not match the glue at your registrar). Further down you use actual glue, but label it as "for the subdomain". Confusing for DNS beginners.
Last, but certainly not least, you try to define
DOMAIN.COM. MX 0 127.0.1.1
mail.DOMAIN.COM. MX 0 127.0.1.1
in the delegated zone. That's useless. You already defined those in the superzone of it, and no mailserver will ever ask the delegated nameserver about this (unless you use that nameserver as a resolver as well, which is probably not a good idea in any case
Just pointing these things out; while the configuration may work for something you needed it to, if others use this as an example, they'll set themselves up for a fun evening of debugging weird errors down the line (when they've adapted the config to something else, going by the comments and the style you use