Comment 9 for bug 276253

I'm seeing a similar issue with 8.10. My solution was to disable network manager:

$ cd /etc/rc2.d
$ sudo mv S28NetworkManager K01NetworkManager

This is a very bad solution for those who want to manage their networks from within Gnome, but since I don't, it works for me.

Some details:

$ dpkg -l network-manager | grep net
ii network-manager 0.7~~svn20081018t105859-0 network management framework daemon

$ lsb_release -a
No LSB modules are available.
Distributor ID: Ubuntu
Description: Ubuntu 8.10
Release: 8.10
Codename: intrepid

$ grep "Setting system hostname" /var/log/syslog | tail -1
Sep 9 19:09:19 foobar NetworkManager: <info> Setting system hostname to 'localhost.localdomain' (no default device)

$ cat /etc/hostname
foobar

$ cat /etc/hosts
127.0.0.1 localhost.localdomain localhost
127.0.1.1 foobar
127.0.0.1 localhost.localdomain localhost

# The following lines are desirable for IPv6 capable hosts
::1 ip6-localhost ip6-loopback
fe00::0 ip6-localnet
ff00::0 ip6-mcastprefix
ff02::1 ip6-allnodes
ff02::2 ip6-allrouters
ff02::3 ip6-allhosts