All I did to fix this was I opened the zip file for RC1 and extracted the hosts file to my desktop of my Win7 machine, then I renamed the hosts file using root explorer for example to hosts_old then copied the hosts file from the RC1 zip I put on my Win7 desktop to /system/etc and set the permissions the same as the hosts_old file I renamed. Then I rebooted my phone and everything works flawlessly. So Newt is correct in stating copying it from RC1 will work. Hope this helps