I have always used BIND on OSX to provide a local DNS resolver for my local development machines, particularly to facilitate virtual machines accessing my local dev environment.
I used to use a local DNS server running on the MAC until I discovered DNSMasq on DD-WRT
I setup a DD-WRT router for my LAN and WIFI and then used the DNSMasq feature of DD-WRT to list all entires that should map to development machines.
Log into your DD-WRT router:
Under Services, Enable DNSMasq
Under "Additional DNSMasq options" list each entry you want to mask:
address=/[url]/[ip]
Examples:
address=/www.dev.mysite.com/192.168.1.10
address=/photos.dev.mysite.com/192.168.1.11
address=/static.dev.mysite.com/192.168.1.12
This is almost like running your own DNS server on the router just for local addresses but without the overhead.
This way I can connect to local development machines via the LAN and all mobile devices via WIFI without much hassle.
Advantages: