The LMHOSTS file is far from the most efficient solution to NetBIOS name resolution, but is of use in environments without WINS. Created on the same principal as the hostname-resolving HOSTS file, the LMHOSTS file is a plain text file that contains NetBIOS names in one column, followed by IP addresses in the other. A client can consult this file in trying to resolve a name to an address. Because the use of this file is associated with Microsoft B-node, it only makes sense to put mappings for remote hosts in this file – local hosts will always be found by the broadcast that happens prior to LMHOSTS consultation. By default, the LMHOSTS file can be found in the %systemroot%\system32\drivers\etc directory. You should also have an awareness of the optional tags that can be used with the file, as these provide additional functionality, as outlined below. Also note that you should place the most commonly used entries at the top of the LMHOSTS file, since the file is parsed from top to bottom.
Useful LMHOSTS file tags:
#PRE – Entries marked with the #PRE tag are pre-loaded into the NetBIOS name cache.
#DOM: – these entries designate domain controllers
– this entry marks the path to a centralized LMHOSTS file on the network. This can be a useful alternative to WINS (though still a great deal of work), but remember that the NetBIOS name-to-address mapping of the host with the centralized file must also be included in this LMHOSTS file.#MH – this entry designates that multiple entries exist for a name since the system is multihomed (has multiple network interfaces)
Note that Windows 2000 will use the LMHOSTS file by default, but this can be changed via the WINS tab in your Advanced TCP/IP settings. Consult the screen shot of the WINS tab later in the article to see the checkbox.