remote-server-not-found after Funny SVR DNS Lookup ...

the contents of the /etc/hosts

127.0.0.1 localhost localhost.localdomain jabber.safe-fit.com jabber
184.106.152.236 vps-sh-safe-fitweb01

the contents of the /var/log/ejabberd/ejaberd.log

=INFO REPORT==== 2010-11-09 00:44:21 ===
I(<0.36.0>:ejabberd_app:72) : ejabberd 2.1.5 is started in the node 'ejabberd@vps-sh-safe-fitweb01'
=INFO REPORT==== 2010-11-09 00:44:27 ===
I(<0.456.0>:ejabberd_listener:232) : (#Port<0.3292>) Accepted connection {{71,252,142,80},43592} -> {{184,106,152,236},5222}
=INFO REPORT==== 2010-11-09 00:44:28 ===
I(<0.460.0>:ejabberd_c2s:724) : ({socket_state,gen_tcp,#Port<0.3292>,<0.459.0>}) Accepted authentication for user1 by ejabberd_auth_internal
=INFO REPORT==== 2010-11-09 00:44:28 ===
I(<0.460.0>:ejabberd_c2s:847) : ({socket_state,gen_tcp,#Port<0.3292>,<0.459.0>}) Opened session for user1@jabber.safe-fit.com/Gajim
=INFO REPORT==== 2010-11-09 00:44:29 ===
I(<0.460.0>:ejabberd_s2s:368) : New s2s connection started <0.462.0>
=INFO REPORT==== 2010-11-09 00:44:29 ===

I(<0.462.0>:ejabberd_s2s_out:1158) : Trying to open s2s connection: jabber.safe-fit.com -> user2 with TLS=false
=INFO REPORT==== 2010-11-09 00:44:29 ===
I(<0.462.0>:ejabberd_s2s_out:229) : s2s connection: jabber.safe-fit.com -> user2 (remote server not found)

Doing a tcpdump reveals the following queries (that fail)

_xmpp-server._tcp.user2.
_jabber._tcp.user2.
AAAA? user2.

my SRV DNS record and their responses

dig +short _xmpp-server._tcp.safe-fit.com SRV --> 0 5 5269 jabber.safe-fit.com.
dig +short _xmpp-client._tcp.safe-fit.com SRV --> 0 5 5222 jabber.safe-fit.com.
dig +short jabber.safe-fit.com --> 184.106.152.236

in My Config:

{hosts, ["jabber.safe-fit.com","vps-sh-safe-fitweb01"]}.
{acl, admin, {user, "user2", "jabber.safe-fit.com"}}.

I registered my username like so:

ejabberdctl register user2 jabber.safe-fit.com ''

I added another user (user1) via the web interface and when I open the IM client and try to talk to user2 I get the following error

error while sending "test" ( remote-server-not-found )

I do not know why the user is in the place of the server name .. What gives ??
Any help would be greatly appreciated !!!