diff --git a/MANIFEST.in b/MANIFEST.in
index 607c4271ae..158b1efa93 100644
--- a/MANIFEST.in
+++ b/MANIFEST.in
@@ -1,3 +1,4 @@
 include README.md AUTHORS.md ansible.spec
+include examples/hosts
 recursive-include docs *
 include Makefile
diff --git a/ansible.spec b/ansible.spec
index 8bae80f8e4..360ccc4347 100644
--- a/ansible.spec
+++ b/ansible.spec
@@ -34,6 +34,7 @@ make docs
 %install
 python setup.py install -O1 --root=$RPM_BUILD_ROOT --record=INSTALLED_FILES
 mkdir -p $RPM_BUILD_ROOT/etc/ansible/
+cp examples/hosts $RPM_BUILD_ROOT/etc/ansible/
 
 %clean
 rm -rf $RPM_BUILD_ROOT
@@ -45,7 +46,8 @@ rm -rf $RPM_BUILD_ROOT
 %{python_sitelib}/*
 %{_bindir}/ansible*
 %{_datadir}/ansible/*
-%{_sysconfdir}/ansible/
+%config(noreplace) %{_sysconfdir}/ansible/
+
 
 %changelog
 * Sat Mar 10 2012  <tbielawa@redhat.com> - 0.0.1-1
diff --git a/examples/ansible_hosts b/examples/ansible_hosts
deleted file mode 100644
index 76a289565c..0000000000
--- a/examples/ansible_hosts
+++ /dev/null
@@ -1,12 +0,0 @@
-[webservers]
-alpha.example.org
-beta.example.org
-192.168.1.100
-192.168.1.110
-
-[dbservers]
-192.168.1.200
-192.168.1.201
-foo.example.org
-bar.example.org
-
diff --git a/examples/hosts b/examples/hosts
new file mode 100644
index 0000000000..f58b26ed9e
--- /dev/null
+++ b/examples/hosts
@@ -0,0 +1,37 @@
+# This is the default ansible 'hosts' file.
+#
+# It should live in /etc/ansible/hosts
+#
+#   - Comments begin with the '#' character
+#   - Blank lines are ignored
+#   - Groups of hosts are delimited by [header] elements
+#   - You can enter hostnames or ip addresses
+#   - A hostname/ip can be a member of multiple groups
+#
+# Ex 1: Ungrouped hosts, specify before any group headers.
+green.bikeshed.org
+blue.bikeshed.org
+red.bikeshed.org
+bikeshed.org
+bastion.secure.bikeshed.org
+192.168.100.1
+192.168.100.10
+
+# Ex 2: A collection of hosts belonging to the 'webservers' group
+[webservers]
+www01.bikeshed.org
+www02.bikeshed.org
+wheel.colors.com
+192.168.1.100
+192.168.1.110
+# Your personal website also runs a webserver:
+myserver.com
+
+# Ex 3: A collection of database servers in the 'dbservers' group
+[dbservers]
+db01.intranet.mydomain.net
+10.25.1.56
+db02.intranet.mydomain.net
+10.25.1.57
+# Perhaps you serve a db off your personal server too:
+myserver.com