When it works, it works because your router is running udhcpc or something similar which acts both as a DNS resolver for the local network and the DHCP server. Most devices, including the N900, send their hostname in the DHCP request. That hostname then gets put into the resolver on the router and you have happy days.

Needless to say, if your other device (say, your PC) isn't using the router's DNS server, it won't work.