On the DNN Host Site Management page, where the Site Aliases are displayed, I was expecting to be able to click the site alias and display the page. I expected DNN had connected the site alias hyperlink to the portal. This apparently is not the way it works. I'm not clear on where host headers enter into this scenario.

Sorry - I am missing some fundamental linkage in this conversation. Let me clarify my environment, firstly: I have my own Windows 2008 Web edition server running IIS 7.0 and SQL 2008 R2. I installed the DNN files in the Default Web Site (physical path: c:\inetpub\wwwroot). I applied the Network Service permissions to all child objects. I created a new database and added the 'sa' account to security. I ran the DNN Install Wizard and successfully opened a the new site. On the Site Management page, I saw the new site was named 'Portal Manager' and 2 aliases automatically assigned: 'localhost' and 'machinename'. I tested both of these aliases in IIS and then tested the machinename\default.aspx from another LAN machine successfully.
I then created a new parent portal, named 'Site1'. The site was created by a message at the end said it could not send email notification, but 'click here to view site'. The Click Here link opened a browser with the google search page say it could not find site1.
I then added a host header in IIS for site1. It made no difference.

So this is where I am stuck. New portals cannot be found - DNN does not appear to be handling the url requests and passing them to the portal.

Thanks for any more directions you can offer.

I added host headers in IIS 7.0, in the format www.sitename, for each of the 4 domains I am hosting.

Next, adding a www Host record to the Forward Lookup Zone for each of the domains, pointing to the IP address of the virtual webserver, enabled access on the LAN to all of the DNN portals on the webserver. However, I still am unable to access the portals from the internet.
It appears that http requests from the internet are not being delivered to the webserver, where the default DNN Host portal would distribute them to the proper portal. The router is forwarding Port 80 to the webserver, and the webserver has host headers matching the domain names, so there is still something missing from the final solution.

Anybody have any hints?