I do not set HOSTNAME= in /etc/sysconfig/network and the system picks up my hostname from a reverse dns entry eventually. With systemd however it just refuses to boot:
systemd: Set hostname to <�V�.
type=1701 audit(1279744659.081:5): auid=4294967295 uid=0 gid=0 ses=4294967295 subj=system_u:system_r:init_t:s0 pid=1388 comm="systemd" sig=6
systemd: Caught <ABRT>, core dump failed.
systemd: Freezing execution.
I added HOSTNAME=localhost.localdomain and it now boots.
Thanks, fixed upstream. Will be fixed in the next I upload which I am currently preparing.