I was trying to edit the HOSTS file on Windows Server 2008 with Notepad++ but after editing it wouldn't let me save it with a "Save failed" - "Please check whether if this file is opened in another program" (the ...whether if... is their message not my typo).
Anyhow, didn't turn out to be read-only as I initially thought or another process as suggested (I did try stopping several services to see if that would help) but instead it turned out to be the fact that I hadn't started Notepad++ as administrator.
I don't understand why I need to run Notepad++ as administrator to edit the HOSTS file but aparently I do. I'm sure that it's just a matter of getting used to this new Vista style UAC that I assume is the underpinning of the security model in Server 2008.
To run Notepad++ (or any other program) as an administrator just right click on the application and select "Run As Administrator."