virtual hosts

Hello all,
I have a small question regarding virtual hosts in pulicfiles. I made a 
directory payal and put my index.html in it. When I did 
http://payal/index.html it started looking for host and then gave up. The 
user guide says I have to add an A record. I don't know much about dns. I 
have just installed dnscache. I guess I have to configure tinydns or is there 
any other way? Thanks a lot in advance.
-Payal