What about listing similar entries on the same line?

Like:

127.0.0.1 www.somehost.com
127.0.0.1 somehost.com

Becoming:

127.0.0.1 www.somehost.com somehost.com

Only that simple move would make the hosts file smaller.

AND even worse. In the blocked sites list in IE and Firefox, both "www.somehost.com" and "somehost.com" are listed, when you could add "*.somehost.com" (or "*somehost.com") instead. That would same space AND time... The list is awful long, takes ages to open in FF