It looks like, at least with network installs, an /etc/hosts file is written to /mnt/sysimage rather early, which conflicts with the hosts file that comes in the setup package, leading to an immediate /etc/hosts.rpmnew
Have a patch to fix this up now. Attaching it to this bug report if you want to try it out, but also for my own record keeping.
Created attachment 336579 [details] 0001-Do-not-write-etc-hosts-since-setup-owns-that-now.patch
Fix will be in anaconda-11.5.0.39-1 and later.
This bug appears to have been reported against 'rawhide' during the Fedora 11 development cycle. Changing version to '11'. More information and reason for this action is here: http://fedoraproject.org/wiki/BugZappers/HouseKeeping