this is definitly fixed in latest NM. I dont know the status in
intrepid. doesnt the workaround given in summary work? Are you using the
ifupdown plugin at all?

** Changed in: network-manager (Ubuntu)
       Status: Confirmed => Fix Released

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NM 0.7 sets hostname to localhost.localdomain instead of what is in 
/etc/hostname
https://bugs.launchpad.net/bugs/276253
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