That is an unusual request. Generally, you should just have to add a hostname in /etc/nodename if you're using DHCP. That way the standard DHCP setup in /etc/default/dhcpagent should know what hostname to assign your machine when it allocates an IP for you.
I'd be interested to know how this turns out. Maybe it was a typo in the instructions (?) Doesn't seem to make any sense that you'd add an IP/hostname entry into /etc/hosts if you shouldn't be able to know what it is before DHCP assigns it to you