In my experience, the server fails over in the order defined by /etc/nsswitch.conf, which is often something like "files dns".
If you have set sharenfs=on, then this is moot, but if you have anything more granular, then...sad cats, unless your DNS updates appropriately, in which case this is moot. I guess I, like a few others, aren't understanding if your problem is that it's trying to do this by IP and not DNS, or if you think your DNS is updating and it's trying to do it by DNS, but is ending up doing it by IP, or if you wanted to automagically update /etc/inet/hosts, and aren't using actual DNS lookups at all. - Rich -- Sears has everything.