I was just able to edit my hosts file with Norton Internet Security 2010. Which Norton product and version are you using? Which operating system?
Also Make sure you have the hosts file properties not selected as "read-only"
The details are:
Nortons Internet Security 2007 running under Win XP Pro with all the latest patches. I have poked around in Nortons UI but have not been able to find a way to tell it to unlock the file and leave it alone. I am just guessing that Nortons must have done something to the file security descriptors, as I have never seen a file locked like this before.
It is locked with more than the simple read only attribute, which I have changed already.
Since you're able to upgrade to 2010 for free, I would uninstall 2007, see if you can change your hosts file, and then install 2010 (from http://www.norton.com/nis10 ). This will help you narrow down what is blocking you from being able to edit the file.
Do you have any other security software installed?
You could run the free version of malwarbytes to check and see if malware is blocking you from unlocking your host file. Download malwarebytes, install, update and run a full scan. You can post back your log by clicking on add attachments right under the host button. If you do have malware on your computer, the new version of Norton's may not install correctly.
Spybot Search and Destroy has a setting for locking the hosts file. Do you have that program installed on your PC? If so go into Advanced Mode > Tools > IE Tweaks to change the setting.
After Googling around, I think you are infected with something which has locked the host file. Have you run a full system scan? I know your present Norton's is old, but I'm wondering if 2010 will install if there is malware on the computer?