Naming my computer on a LAN

[Gartside, Andrew]

I'm using RedHat 7.1, purely in text mode (no GUI packages installed). I'm
connected to a LAN, but have not configured proxy servers yet. Nevertheless,
I can ping my machine using its IP address and can open shared files on the
LAN. Nothing I do, however, seems sucessful in giving my machine a domain
name.
Assume I'm logged in as root:
# hostname <newname> changes the name sucessfully. 
# hostname now shows the new name.
# exit logs root out
Screen now shows: <newname> login:   it looks like the name was changed
sucessfully, but I can't ping the name from another machine and the DNS
machine doesn't acknowledge the existence of <newname> on the network.
If I reboot, the machine forgets the changes and reverts to <localhost>,
even though the actual LAN connection is still up and I can ping my own
machine from a remote node using the actual IP address.
Online help suggests that during boot process /etc/rc.d/rc.inet1 and/or
/etc/init.d/boot are invoked and that they read from the /etc/hostname file
to determine the name of the host machine. The trouble is, none of these
files exist on my machine at all - certainly not in those directory
locations! I tried creating /etc/hostname as a text file with my machine's
full domain name in it. Made no difference. Can anyone tell me what to do
next? The DNS is a W2K system. I installed RedHat from a download onto a
Pentium II, choosing the basic packages (sans GUI's). This is a fresh
install with new partitions.
Also, where do I start in configuring proxy servers for mail and internet
access, please? (even a command to look up in the man pages would help).
Thanks 
Andrew Gartside