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Routing through Tor using a local DNS proxy such as TorDNS and Privoxy works on all major OS's. However, even without sending all web traffic through Tor, there are problems such as difficulty using Google, for example.

Besides, there is a chance that popular Tor exit nodes might be subject to DNS hijacking, invalidating all our efforts. What popular nodes should be avoided?

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While it is possible that someone could do the thing that you are afraid of, I have never seen it or heard about it happening. If you notice it happening, just ban the node you are using.

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I once encountered an exit node that would inject malware into tor.eff.org -- but that happened once, and using HTTPS would have protected against this. So it's a real, but not very big threat. – grawity Aug 14 '11 at 10:14
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