Things seem somewhat confused in your post. This may help you -
Named is the DNS functionality, what you would use to run a DNS server on your linux box.
The file /etc/resolv.conf is where you can specify what DNS server to use for your internet connection.
Getting a website running on localhost is not an issue of DNS, but if you have a webserver running on the machine. The most popular webserver in the world is apache. It will run beautifully on your fedora Core 3 box. If apache is installed and running, opening http://127.0.0.1
will bring up whatever you have in the webroot, which is located by default to /var/www/html/, and of course can be moved anywhere else if you prefer.
Post back if you are having additional problems.