Wildcard Subdomains & OS X Local Development

I'm using the simple account_location plugin to have virtual
subdomains on my app (account.myapp.com - see Basecamp, Blinksale,
etc.)

How do you go about setting up your OS X system to play nice? I'd like
to use Apache & Mongrel.

Notes: The only thing I've able to accomplish is hardcoding the
subdomains directly in my hosts file. I can get "test.localhost.com"
to work fine, that's not really a wildcard subdomain. I wouldn't be
able to test the app's ability to create and recognize subdomains

I'd gotten the tip to setup a local DNS server, but I couldn't get
anything installed right.

http://woss.name/2006/11/13/setting-up-local-name-server-on-mac-os-x/

Used it on all my computers already and works perfectly.

Best regards

Peter De Berdt