BIND and Default Server: UnKnown

[imtired]

Hi all, Im trying to setup a DNS server at home for a possible business using Windows XP Pro and BIND9

Got most of it working now (ie able to bowse using the IP for the DNS server -yay) but when i use nslookup i get the following error:

C:\>nslookup
*** Can't find server name for address 192.168.0.2: Non-existent domain
*** Default servers are not available
Default Server: UnKnown
Address: 192.168.0.2

Using:
A static IP from ISP
I have a vaild domain pointing the the static IP

I heard this error can be from not having a vaild PTR in 0.0.127.in-addr.arpa. so I added one but it is still happenning?

details of settings are as follows:
From the "named" file

zone "localhost" IN {
type master;
file "db.127.0.0.txt";
allow-transfer { none; };
};

From the db.127.0.0.txt file
$TTL 3h
0.0.127.in-addr.arpa. IN SOA mydomain.com. mydomain.com. (
1 ; Serial
3h ; Refresh after 3 hours
1h ; Retry after 1 hour
1w ; Expire after 1 week
1h ) ; Negative caching TTL of 1 hour

serverName.mydomain.com IN A 192.168.0.2
0.0.127.in-addr.arpa. IN NS mydomain.com.
mydomain.com. IN MX 10 mydomain.com.
1.0.0.127.in-addr.arpa. IN PTR localhost.
1.0.0.127.in-addr.arpa. IN PTR 192.168.0.2.

Anyone got any ideas about what im doing wrong? Or if you need further info?