DHCP host name?

Hi. I want my linux clients to setup their host names from a dhcp server. The IP-numbers works fine but the host name is always set to "linux". Using Yast2 I have in the "Host name and DNS" module checked the "Change host name via DHCP". This I believe sets the variable DHCLIENT_SET_HOSTNAME=yes in the file /etc/sysconfig/network/dhcp. But nothing seemingly takes notice of that since host name still is "linux". The script /etc/init.d/boot.localnet sets host name to whatever is found in the file /etc/HOSTNAME, which currently is "linux.local". However I expected the DHCP setup to override this. What am I missing here? The clients are running SuSE 8.0. /Anders