Site not browse able with host header – 401.1 error

ISSUE DESCRIPTION
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>SharePoint site is browse able from the client machine with the host header.
>When browsing from the server, it prompts for credentials three times and then we get 401.1 Unauthorized error.
>On server, we can browse the SharePoint site with server name(In some cases even with server name, the site doesn’t come up)

RESOLUTION
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>Remove the security update KB963027 for Internet Explorer 7.0 and then reboot the server.
>If that didn’t work try with http://support.microsoft.com/kb/896861