I can confirm epiphany reads /etc/hosts correctly. I even use the same technique as you describe in the initial report regularly.
However, it doesn't re-read this file before being restarted. -- .''`. : :' : We are debian.org. Lower your prices, surrender your code. `. `' We will add your hardware and software distinctiveness to `- our own. Resistance is futile. -- To UNSUBSCRIBE, email to [EMAIL PROTECTED] with a subject of "unsubscribe". Trouble? Contact [EMAIL PROTECTED]

