Virtualbox DNS stopped working on upgrade to 12.10
In addition to VBoxManage modifyvm "name" --natdnsproxy1 on, I also had to run VBoxManage modifyvm "name" --natdnshostresolver1 on on each of my VMs to get DNS working. I found that tip on this page.
Got it
VBoxManage modifyvm "VM name" --natdnsproxy1 on
Virtual box has a DHCP server for the NAT engine. Which has a list of registered DNS servers. The above command hides this DNS server list and use the host's resolver settings, thereby forcing the VirtualBox NAT engine to intercept DNS requests and forward them to host's resolver