If you've played with networking at all, you should be familiar with 127.0.0.1 being localhost. If you look closely at the network settings, you'll see that this is on a loopback device, and it's configured as a /8 network, not just that one IP address. That means any IP address in the range of 127.0.0.0 through 127.255.255.255 goes to the loopback device. Typically your hosts file only uses one of those addresses, namely the aforementioned localhost.
