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User-Agent: Mozilla/5.0 (X11; U; Linux i686; en-US; rv:1.7.10) Gecko/20050719 Epiphany/1.6.3

Description of problem:
Noticed that NetworkManager behaves strangely also at work, for some reason I am not able to reach local addresses by name through the NetworkManager DNS setup.
These two nslookup commands should display the problem.

nslookup thomas
Server:         127.0.0.1
Address:        127.0.0.1#53

** server can't find thomas: NXDOMAIN

nslookup thomas - 192.168.1.1
Server:         192.168.1.1
Address:        192.168.1.1#53

Name:   thomas.fluendo.lan
Address: 192.168.1.10

Version-Release number of selected component (if applicable):
NetworkManager-0.4-20.FC4.1

How reproducible:
Always

Steps to Reproduce:
The NetworkManager-named.conf looks like this:
// Named configuration, generated by NetworkManager

options {
        directory "/";
        query-source address * port *;
        forward only;
        forwarders { 192.168.1.1; };
        listen-on  { 127.0.0.1; };
        pid-file "/var/named/data/NetworkManager-pid-named";
};

// Disable rndc
controls { };

Actual Results:  So as you see the dns server set up by NetworkManager for some reason fails to give me results on local addresses.

Expected Results:  To compare external addresses works fine:
nslookup www.redhat.com
Server:         127.0.0.1
Address:        127.0.0.1#53

Non-authoritative answer:
Name:   www.redhat.com
Address: 209.132.177.50

nslookup www.redhat.com - 192.168.1.1
Server:         192.168.1.1
Address:        192.168.1.1#53

Non-authoritative answer:
Name:   www.redhat.com
Address: 209.132.177.50


Additional info: