Resolving a DNS issue

Well, I don't connect to a vpn gateway.
We DO however have a VPN router that in turn has a second router hanging off that. Nothing else has a problem with this setup.

 

Old Post, but just ran into this deploying a Fresh install of Win 7. Turns out, I had to install SP1 for it to work. Since i had no internet, downloaded .iso from Microsot on OS X and then chose "Image" from CD/DVD Options. Once installed and Parallels Tools re-installed, Instant Connectivity on Shared and Bridged -> Default Adapter

The Win 7 SP1 can be downloaded here. https://support.microsoft.com/en-us/help/14162/windows-service-pack-and-update-center

 

For us the host file setting did nothing. We ultimately solved by entering the Google DNS 2001:4860:4860::8888 for the IPv6. Note that entering the DNS for IP4 did not work in our case..we had to use V6. After entering that we were finally able to resolve domain names while connected via VPN.