For a development box, you can set both the address and hostname to 127.0.0.1. Somewhere I read that OS X drops the ethernet device if there's no physical RJ45 cable and the Airport card (on a PB) can't find a network, and this avoids that problem. It works for me anyway even though
why it does dips below my Tech Knowledge Event Horizon.
But there must be more than one way to do it, since Vinod uses 0.0.0.0 for the address and localhost for hostname -- see this thread.