A while ago Microsoft released an update, which prevents that you can log on locally to a website which has a FQDN.

To resolve issues with e.g. the crawling a KB article has been published.

You receive error 401.1 when you browse a Web site that uses Integrated Authentication and is hosted on IIS 5.1 or a later version

You can disable the loopback check completely, or just for the used FQDNs. This would be the better way.

Manually setting the required registry entries on every SharePoint server in the farm can be a nasty task.

A better way to do so is a custom stsadm extension. Gary Lapointe has written such an extension. Take a look at it: Setting Back Connection Host Names for SharePoint 2007 Using STSADM

Quote:

You can of course do this using Group Policy but for those not managing their servers using GPO I decided to implement a custom STSADM command that would make setting the BackConnectionHostNames registry key really simple.  I called this new command, oddly enough, gl-setbackconnectionhostnames.

The following is an example of how to update the BackConnectionHostNames registry key on the current server only:

stsadm -o gl-setbackconnectionhostnames

The following is an example of how to update the BackConnectionHostNames registry key on all servers in the farm:

stsadm -o gl-setbackconnectionhostnames -updatefarm -username domain\spadmin -password pa$$w0rd

Download of the custom stsadm extension: http://stsadm.blogspot.com/2009/02/downloads.html (WSS Only STSADM Extensions (x86, x64))