Joe Noon -- joe at stat dot im
Here's how to use dnsmasq to resolve *.dev to on OSX:

1.) sudo port install dnsmasq
2.) Add line to the top of /opt/local/etc/dnsmasq.conf
3.) sudo mkdir -p /System/Library/StartupItems/DNSMASQ
4.) sudo nano /System/Library/StartupItems/DNSMASQ/DNSMASQ
. /etc/rc.common
if [ "${DNSMASQ}" = "-YES-" ]; then
  ConsoleMessage "Starting DNSMASQ" 
5.) sudo nano /System/Library/StartupItems/DNSMASQ/Startup\ Parameters.plist
  Description = "Local DNSMASQ Server";
  Provides = ("DNS Masq");
  OrderPreference = "None";
  Messages = 
  start = "Starting DNSMASQ";
  stop = "Stopping DNSMASQ";
6.) Add line to /etc/hostconfig
7.) sudo chmod +x /System/Library/StartupItems/DNSMASQ/DNSMASQ
8.) sudo /System/Library/StartupItems/DNSMASQ/DNSMASQ
9.) In network settings make sure is in your dns server list.  If you do:
  You should see something like this near the bottom (if not, your network settings need to 
  be applied.. try this to flush dns cache: dscacheutil -flushcache ):
    ;; SERVER:
10.) Test it:
  : PING ( 56 data bytes
  : 64 bytes from icmp_seq=0 ttl=64 time=0.031 ms