Steps to Reproduce:
1. Edit /etc/sysconfig/network and set up hostname.domain and *do not* set up 
   reverse for this hostname.domain

<Amita>
[root@rheltest ~]# cat /etc/sysconfig/network
NETWORKING=yes
HOSTNAME=rheltest
[root@rheltest ~]# hostname
rheltest
[root@rheltest ~]# host rheltest
Host rheltest not found: 3(NXDOMAIN)
</Amita>


2. # yum install redhat-ds -y

3. # setup-ds-admin.pl

<Amita>
test 1- Did not specify any name "Computer name [rheltest.pnq.redhat.com]:"
Result : Your new DS instance 'rheltest' was successfully created.

test 2 - Specified the FQDN, without setting the test machine ip in /etc/hosts.
Result : Got the warning message and installer prompted to proceed anyway with the problematic hostname.

test 3 - Specified the FQDN.
Result : Your new DS instance 'rheltest' was successfully created.

Results are as expected hence marking the bug as VERIFIED.
</Amita>

An advisory has been issued which should help the problem
described in this bug report. This report is therefore being
closed with a resolution of ERRATA. For more information
on therefore solution and/or where to find the updated files,
please follow the link below. You may reopen this bug report
if the solution does not work for you.

http://rhn.redhat.com/errata/RHEA-2011-0533.html