dig is your friend here for analysing DNS issues. If you're a Windows man like me, you can get dig for Windows from Nicholas Fong's site. (site also has basic user guide on it) - if you can't resolve it, the server's IP is 18.104.22.168 for your hosts file!
Find out the IP address of your primary DNS server then run
dig www.google.com. @ip.of.dns.server
If that yields something with
;; AUTHORITY SECTION:
com. 900 IN SOA a.gtld-servers.net. nstld.verisign-grs.com.
(or similar) in the results, then your DNS server's poorly. If you get a list of results in the ANSWER section including
www-tmmdi.l.google.com (for example) then your DNS resolver is working and your own PC is not.
As others have said, try Google's DNS servers. Alternatively, try OpenDNS' servers: 22.214.171.124 and 126.96.36.199. Best of luck...