Mac OS X Lion (10.7.2) screws host resolution

As Justin Carmony points out, Mac OS Lion changed its behavior towards DNS and the usage of /etc/hosts (it quite disregards this file).

This has several ugly effects, including:

• no matter how many Apache Virtual Hosts you've set up, you will only get the first (that is, the implicit default), and only by typing localhost into your browser
• the Passenger pref pane won't work any more (actually it does, but it has no effect)