I hope there not silly enough to think the file doesn't have a purpose but I'm afraid some are...😉
Just to make it clear the /etc/hosts is file is there to assist in network node addresses (connecting ip address to human friendly names). For example 127.0.0.1 localhost makes it possible to use the name localhost which then points to the ip address 127.0.0.1.
People sometimes use it to "fool the system" by adding lines like 127.0.0.1 activate.adobe.com. So when an application tries to connect to activate.adobe.com ends up on the local system where no one answers...skipping the activation.
In the above thread it is always possible that by coincidence someone added a line containing the url that facetime tries to connect to, thus ending up on there local system. Removing it would certainly help.
Mine did not contain any stuff related to facetime. It is full of lines like 192.168.0.100 macmini and 192.168.0.101 qnap. Making my life easier when I want to connect via ssh to the MacMini or my Qnap fileserver. That's why I stated that "just deleting everything" is not the answer.
What did help was a "reload" of the file by editing it (not changing anything) and saving the file.
I used "vi" to edit the file via the commandline. (http://en.wikipedia.org/wiki/Vi)
The :wq! is to Write (save) and Quit (leave the file). The ! is to force the action (all is explained on the wiki page).
I think in your case you "deleted everything" (except the localhost stuff) and saved the file reloading it in the proces.
Hopefully this makes my post clear...