The /etc/defaultdomain file is used by NIS and NIS+ to specify a host's domain name within those naming services. So if you aren't using NIS or NIS+, you don't need to modify this file.
For DNS, you can update your /etc/resolv.conf file to look something like this:
domain nonroutable.com
nameserver 192.168.2.254
And make sure your /etc/nsswitch.conf file has:
hosts:files dns