dnsmasq for caching

[kwhiskerz]

This is what I have done:

I have made a file, resolv.servers with the nameservers I want to use. I have 
edited resolv.conf so that it looks at 127.0.0.1. I have put PEERDNS=no into 
ifcfg-eth0 so that resolv.conf does not get overwritten at boot. I have 
edited dnsmasq.conf to use only resolv.servers in strict order.

I am able to connect to the internet and I can verify that I am using my 
chosen nameservers, so this setup appears to be working.

I have set up 2 computers and have exactly the same files in both.

On one computer, when I type dig someplace.com the search takes ~300ms and 
subsequently ~0ms and no lights flash on my adsl router. Caching appears to 
work.

On the other computer, when I type dig someplace.com the search takes ~300ms 
and subsequently ~35ms and lights flash on my adsl router. I suspect caching 
is not working.

What is happening here? How does one properly set up dnsmasq to do dns 
caching? Why is the same setup acting differently on the 2 machines? Network 
Manager is not enabled on either machine.

Any ideas?