Check out http://webdevtuts.co.uk/tutorials/set-multiple-virtual-hosts-wamp/ for another really great way to setup vhosts.
If you’re using WAMP for your local development, here’s how to setup virtual hosts. This comes in handy when you’re dealing with frameworks like Zend or Joomla and setting up a WAMP alias won’t do. Keep in mind I’m doing this in Windows XP and WAMP 2.0 so file locations may vary.