Thanks. For most instances like ours where we are using a static IP address and have permissions to add DNS entries manually to our DNS servers it really isn't an issue. However if people don't have permissions to add DNS entries into their DNS servers and are relying on DHCP to hand out an IP address for the appliance and then DHCP enters the DNS entry in the DNS server, it will enter "localhost" as the entry in DNS. We observed that in our environment before we used a static IP address and added the DNS entry manually.
I will mark this as answered. Thanks