I'll add my experience here as it seems relevant. I have a WRT54GL running openwrt, acting as DNS server for my LAN. I've configured each machine with a static IP address through DHCP and I have my own internal top-level domain (.lan). Other linux machines on the network can ping each other by hostname inside the network, but my N800 running OS2008 (or OS2007) doesn't *unless* I ping by the fully qualified name (desktop.lan instead of just desktop). Might be do to not having "search lan" in resolv.conf . I didn't bother solving it since the "workaround" is 4 characters.

-John