WareLogging, [http://www.thekelleys.org.uk/dnsmasq/doc.html a DNS forwarder for NAT firewalls]:

:Dnsmasq is a lightweight, easy to configure DNS forwarder and DHCP server. It is designed to provide DNS and, optionally, DHCP, to a small network. It can serve the names of local machines which are not in the global DNS. The DHCP server integrates with the DNS server and allows machines with DHCP-allocated addresses to appear in the DNS with names configured either in each host or in a central configuration file. Dnsmasq supports static and dynamic DHCP leases and BOOTP/TFTP for network booting of diskless machines.

<[Brennen]> Working pretty well for me on a small office network right now, and dnsmasq.conf is commented with most of the docs you'll need to get it up and running. The only gotcha so far has been that I was having it rely on resolv.conf for upstream nameservers, which is apparently subject to periodic overwrites on most modern Linux systems. There's a spot in dnsmasq.conf where you can specify servers directly:

 # Add other name servers here, with domain specs if they are for
 # non-public domains.
 server=206.168.216.6
 server=206.168.216.4

I don't actually know if it's using both of these values, but the manpage kind of gives the impression that it is.