Can't connect using 'localhost' but '127.0.0.1' works

I'm trying to connect to SQL Server using the string 'localhost', but I
always get a timeout error using either Query Analyzer or ADO. But if I
change the string to 127.0.0.1, it works.
A 'nslookup localhost' returns 127.0.0.1. If I run 'telnet localhost
1433', it connects. Any idea why I might not be able to use the string
'localhost'?
Thanks,
Patrick
I'm sorry, I posted this to the wrong group, but if anyone has the
answer, please let me know.
Thanks,
Patrick