Bill,
This is obviously the easiest way to go. I had absolutely no idea SME had an included DNS server. I haven't looked extensively but all references to DNS I could find in the docs referenced Mitel's subscription services - which I can't afford.
My apologies to jamison (I bow my head in shame), as Bill states, if the SME DNS server is a caching/forewarding server, all you'd have had to do is put the hosts file (or simply add the entry in the existing hosts file) in the appropriate directory on the SME box and set the SME IP address as the DNS server on your DHCP server.
In my case, I got around it by using Microsoft's DNS server on my Win2K PDC.
Thanks for the info Bill.