Spybot 4.0/Hosts File

Just upgraded to Program Version 4.0.3 (Build 363) , as soon as it loaded
I got an error "hosts file 12 too large"

Did about an hour of Google, and am more confused than I was when I started.

I am also running WinPatrol v. 9.1

1. Is it time to panic.

2. In Winpatrol options tab, I have ticked Detect Changes to Internet
Explorer Home and Search Pages, and Warn if changes are made to my HOSTS
file. I also have ticked lock HOSTS file. Is all OK at this point?

3. In all of the google searches there seemed to be a lot of info about
deleting the host file, uninstall SpyBot, clear the host file etc. etc. This
seems like it is a bit over the top.

4. Should I try to uninstall the update, and go back to the previous version
and wait for SpyBot to fix this?

5. It seems some users replace there hosts file by using a download. Is this
advisable?

6. Any other suggestions?

Thanks
Bob