After upgrading to foreman-0.4.2-0.1, foreman was unable to create a DHCP lease. Foreman-proxy (version 0.3.1-0.1) log indicates that omshell set 'next-server' to 'false'. I downgraded foreman (via yum) to the previous version (foreman-0.4.1-0.1) and the issue could not be reproduced.

/tmp/proxy.log
W, [2012-02-23T07:37:14.540757 #27750] WARN -- : Failed to resolve IP address for false
D, [2012-02-23T07:37:14.540892 #27750] DEBUG -- : omshell: executed - set statements = "filename = \"pxelinux.0\"; next-server = \"false\"; option host-name = \"csgsandbox.doit.missouri.edu\";"

/var/log/foreman/production.log
Create DHCP reservation for csgsandbox.doit.missouri.edu-00:18:8b:41:ce:d0/10.133.7.4
Conflicting DHCP reservation for csgsandbox.doit.missouri.edu-00:18:8b:41:ce:d0/10.133.7.4 detected
DHCP Settings for csgsandbox.doit.missouri.edu task failed with the following error: Must define a hostname
Rolling back due to a problem: DHCP Settings for csgsandbox.doit.missouri.edu 10 failed csgsandbox.doit.missouri.eduset_dhcp
Failed to save: failed to detect boot server: undefined method `bootserver_ip' for #<ProxyAPI::TFTP:0x7f0bc5154f50>, DHCP Settings for csgsandbox.doit.missouri.edu task failed with the following error: Must define a hostname
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Rendering hosts/edit
Completed in 2061ms (View: 1036, DB: 37) | 200 OK [https://puppet.doit.missouri.edu/hosts/csgsandbox.doit.missouri.edu]