Changing the HOSTS File on Windows
In the XP world, the HOSTS file was directly editable. This helped block malicious servers and enabled Web developers to quickly test a live URL on a local machine. Since Vista and User Access Control constraints, this has become more difficult. The folks over at MVPS have a brilliant solution.
On my Vista laptop, I used the SendTo method outline on their site. Rather than editing the file directly, you create a shortcut called Update Hosts in the \Users\<username>\AppData\Roaming\Microsoft\Windows\SendTo directory. Edit a copy of your HOSTS file in an unrestricted directory, right click and select SentTo > Update HOSTS.
update: an easier way to do this is to simply right click the shortcut to Notepad and select "Run as administrator." That way you are allowed to save the system file