1) Molz, the UnknownHostException is thrown to indicate that the IP address of a host could not be determined. This is a combination of the fact that you are connected via PPP and the problem below. Not so much that PPP is a problem, but add it to the problem below, and you have your situation.
2) gralem, I have a feeling that this problem is related to a problem I have been complaining about in these forums (and to Apple directly) for a while. For more info on what I am talking about, search these forums for a thread called something like "sick and tired of localhost".
Basically, in both cases, we are seeing that the underlying BSD system has no freaking clue as to your real hostname. So, this is not a JDK issue, but an OS X issue, that I have been complaining about for some time. This is a perfect example of why Apple needs to fix this.