I just upgraded to Intrepid and am seeing this.  System would come up
and set the name to "localhost.localdomain" and then "localhost" even
though I had a name in /etc/hostname.

Worse, my X session is started under the name "localhost.localdomain"
and the hostname changes.  After the name changes, I can't start any
programs because the X server refuses to talk to them (unless I manually
set the hostname or use "xhost +")

>From my log file:

Dec 13 11:35:32 dococt NetworkManager: <info>  Setting system hostname to 
'localhost.localdomain' (no default device) 
Dec 13 11:36:22 dococt NetworkManager: <info>    hostname 'localhost' 

(Evidently the name is correctly set by /etc/init.d/hostname.sh during
startup since syslog is logging "dococt" and not "localhost" or some
variant.)

-- 
NM 0.7 sets hostname to localhost.localdomain instead of what is in 
/etc/hostname
https://bugs.launchpad.net/bugs/276253
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