ARRIS NVG589 DNS/hostnames for static IP hosts

I was having lots of problem with my 2-wire router and an AT&T tech replaced it with the NVG589 and I am seeing some strange stuff with my hosts with static IP addresses. For one the hostname of a mac host was changed to "unknownXXXXXXX" where those X's is a string of hex code. Also, the domain was attlocal or soemthing like that. What made this change? Even after setting the hostname on this host back to what it was the host still shows up in Devices->Status as "unknownXXXXXXXXX". The same goes for any other static IP host I have in my LAN why is this and why does it appear that I cannot change this? Is there no DNS server on this device? I am seeing lots of DNS related posts related to this device which is quite worrisome so I am wondering what's the fix. Can I set up a separate DNS and DHCP server internally in my lan to override the NVG589? Also, it seems strange that devices/hosts with DHCP assigned IPs are named appropriately and show up correct. I am willing to set up seprate DNS/DHCP servers if that is what is necessary to get this working withouth breaking wireless. Please advise.