As mentioned above, appletalk works only over TCP / IP. In a nutshell, here are the ramifications of that:
For this example, let's pretend that you are on a network with other macs using appletalk.
A mac running OS 9 or less can connect to your OS X machine by 1) opening the chooser, 2) clicking connect to server, 3) entering the appropriate IP #. As of now, from a machine running something other than OS X, there seems to be no way to browse a netwrok of macs like you used to be able to do in the chooser.
What about the other way around (OSX -> machine running other than OSX)? There seems to be no way to connect right now in that direction, unless you are running ASIP.
How about OSX --> OSX? If you have multiple machines running OSX, if you select "Connect to server" from the go menu, your appletalk servers will show up in your local neighboorhood (assuming that they have Appletalk activated). They will show up by appletalk name, and their IP # will be in the connect box. I haven't tried this on an extended network, just here at home, where the other machines show up in "Local Services".
Whew!
One last point: What is with the "Network" icon found after the "Computer" button has been pressed? I remember reading at apple's site that you could use this to browse your local neighborhood, but it doesn't seem to work for me. Presumably, both here and in the "Connect to server" dialog you will at some point be able to select your "neighborhood". Gag. Sounds like windoze.
Okay one more point. It is not necessary to edit the hostconfig file via the terminal.. Just open up "System Preferences", Click on "Network", give your computer a clever name, and check "appleTalk active". That's it. This GUI will update the /etc/hostconfig file for you. Just thought you'd like to know...