I love the simplicity of this solution
cat infile | paste -sd ' \n'
192.168.1.1 hostname1
192.168.1.2 hostname2
192.168.1.3 hostname3
or make it comma separated instead of space separated
cat infile | paste -sd ',\n'
and if your input file had a third line like timestamp
192.168.1.1
hostname1
14423289909
192.168.1.2
hostname2
14423289910
192.168.1.3
hostname3
14423289911
then the only change is to add another space in to the delimiter list
cat infile | paste -sd ' \n'
192.168.1.1 hostname1 14423289909
192.168.1.2 hostname2 14423289910
192.168.1.3 hostname3 14423289911