NO, your config for DNS-Roules are wrong
To edit the hosts file on server is not the simplest possibility. For ISA Server, for example, you can also define DNS-Roules for all NAT-LAN-Routing (and WAN). Host File is only for Client/Server who don`t support dynamic domain name Services like UINIX or Netware 3.x.
-Roland-
(
Microsoft
Certified
Professional -
)