Why does my name resolution hit the DNS even with a hosts file entry?

I'm running Ubuntu 10.04.2 LTS Desktop. Being a web developer, naturally I created a "me.com" in my /etc/hosts file. Unfortunately, my name resolution is going out to the DNS before first checking my local hosts entry and I can't figure out why.

The end result is that if my /etc/resolv.conf contains nameserver 127.0.0.1 in there first, then I get a response back in my web browser from me.com (local) within less than a second. But if I don't have that entry, then my response takes sometimes as much as 5 seconds if my ISP is a little slow.

The problem was so troublesome that I actually had to file a question here (and someone resolved it) for how to automatically insert that entry into /etc/resolv.conf. But one of the users (@shellholic) here highly recommended (and commented back and forth with me about it) that I should file this question.

Do you know why my workstation's name resolution has to hit the DNS server first before hitting my /etc/hosts file entry? For now, I'm using the resolv.conf trick.

The file /etc/nsswitch.conf will let you reconfigure the order of the name resolution. By default, the host file is the first, then the configured DNS. There could be more options.

The file /etc/hosts only lists IP addresses and hostnames (multiple names for one IP if you want)

The file /etc/resolv.conf will list the default search domains, and will also list in sequence the name servers to use.