There are two (well, three really) ways you can do it.
GUI (using notepad, or whatever editor)
Right click on your favourite editor, ensure you
Run as administrator (escalate them privileges), goto
c:\windows\system32\drivers\etc\HOSTS and then add, edit to your heart's content.
Running without privileges will get you an Access Denied error when you try to save, which is thanks to some Windows security they put up some time ago.
cmd (surprisingly, it has a use sometimes)
cmd into your startbar, right click and
Run as Administrator, then you can just type
echo ipaddress site.com >> c:\windows\system32\drivers\etc\HOSTS
Alternate GUI (What I would advocate)
Hostsman is a nice little program which gives you a GUI you can manage your HOSTS on. I don't know about any other programs, but this seems to work perfectly find for what is needed.