So I verified this fails any time there is a DNS configuration that results
in nslookup returning an error regarding "Non-existent domain."  In my case
this is a system that is not part of a domain but is performing an nslookup
on a system that is in a domain.  Oddly enough, the deprecated method
Dns.GetHostEntry replaces, Dns.GetByName, works flawlessly.  Below you will
find the sample code to reproduce and the nslookup results.

It seems this is a .Net 2.0 bug.

******nslookup results******
nslookup -type=ptr 192.168.100.10
Server:  my-dc.mycompany.int
Address:  192.168.100.10

*** my-dc.mycompany.int can't find 192.168.100.10: Non-existent domain

******Sample Code******
using System;
using System.Collections.Generic;
using System.Text;
using System.Net;

namespace TestDns
{
   class Program
   {
       static void Main(string[] args)
       {
           if (args.Length < 1)
           {
               Console.WriteLine("TestDns [ip address or hostname]");
               return;
           }
           Console.WriteLine("Test #1");
           try
           {
               Console.WriteLine(Dns.GetHostEntry(args[0]).HostName);
           }
           catch (Exception ex)
           {
               Console.WriteLine(ex.Message);
               Console.WriteLine(ex.StackTrace);
           }
           Console.WriteLine("Test #2");
           try
           {
               Console.WriteLine(Dns.GetHostByName(args[0]).HostName);
           }
           catch (Exception ex)
           {
               Console.WriteLine(ex.Message);
               Console.WriteLine(ex.StackTrace);
           }
       }
   }
}