Which database are you using? PEQ or AX?
And, unless you are using MiniLogin, your host file has nothing to do with the emulator. If you are setting up a normal Public server, your EQ PC should be set to point to the emulator login server as shown in the Wiki page here:
http://www.eqemulator.net/wiki/wikka...akka=PlayGuide
The login server uses your IP address and has nothing to do with your dyndns setup (at least as far as I know). Dyndns is really only useful for the tools for the emulator if you use them externally. The dyndns address should only be set in your router and really doesn't have anything directly to do with your PC. All it does is point the URL you pick to your router's dynamic IP address.