Application hosted in IIS is accesible with the host name from some machines but not in others

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C#

ASP.NET

C#4.0

IIS7.5

I hosted an application under default website in IIS. the application is windows authenticated intranet Application. When I try to access the application outside the hosted server. I am able to access it with the host name from some machines. while the other machines throw error message "The resource cannot be found". in these machines(where i get the error) if i try to access with the IP address instead of host name i am able to access the site.

my host server name is kdev

i try to Access the application as http:\kdev\usersetupapp\home.aspx This works fine in some machines. but not in other system I am able to access the application with the IP adress as shown below

http://[10.0.0.1]/usersetupapp/home.aspx

Please help me resolving the issue

Also please let me know if it is fine to host an intranet application under default website itself, or do I need to host it as a separate website. Also If i have to host as separate website do i need to ad DNS entry for the host name?

thanks