Description of problem:
The default nginx configuration will cause problems when using the existing vhost config file

How reproducible:
Install nginx.el5, you will have /etc/nginx/nginx.conf which will contain:
...
include /etc/nginx/conf.d/*.conf;
...
# The default server
server {
    listen       80;
    server_name  _;
...

There will also be /etc/nginx/conf.d/virtual.conf which has an example of how to set up a vhost. Define a simple name-based vhost inside:

server {
    server_name testvhost.localhost;
    # set up root, etc
}

Actual results:
At http://localhost/, you will get the testvhost.localhost host.

Expected results:
At http://localhos/, you should get the default vhost (_).

Additional info:
testvhost.localhost works as expected.
In order to get the expected result, I've moved the "include conf.d" part after the default server setup.