One of the most attractive features of dnsmasq to me is the potential to put all the host network configuration in a single file; keeping my dhcp3-server configuration in one place and my bind configuration in two more is obnoxious.
But -- it looks like dnsmasq will only serve an ip address if the hostname appears in /etc/hosts or in a current DHCP lease (if I'm wrong about this, please tell me!). It'd be really nice to have a configuration option that would load up all the IP addresses from all the dhcp-host option lines...