Thats because www.yahoo.com is registered with a DNS that you computer uses to resolve names with IP addresses. If it cannot find one in by using its own known DNS's it will then look in the hosts file.
Could it be thought that you are using a samba server on the linux box and it is resolving...
I tried these scripts and they also didnt work until i changed the dhcpd.conf script zone parts to
zone XXX.co.uk {
primary 127.0.0.1;
key HOST;
}
zone 27.44.88.in-addr.arpa {
primary 127.0.0.1...
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