Have you tried the direct IP address that the DN refers to (from within a browser, and in the test)? That would at least verify if you have having issues with your domain server. Also, does your network config require that you use a proxy within ACT? If so, the test might not be reaching your domain server at all, hence the lack of name resolution.
Later I studied the recorded script. I was recording the test script when the qaforums was running. Within the script, the connection to the Beta Soft was attempted. I came to know about this when I looked the ACT's Log file.
when I remove the connection attempts to beta soft, I am through.