When I login to salesforce through Eclipse Force.com IDE, there are four way to specify environment. Why is the fourth Other(Specify) with Hostname needed ?
If you use a custom domain for your Salesforce Org, instead of the standard login.salesforce.com, or test.salesforce.com, then to connect, you need to tell the IDE what path to connect with. Similarly, using tools like Salesforce1, you also need to use a similar 'custom host'.
For example: Widget Incorporated may have branded their org with a My Domain setting. Users would have to go to something like WidgetInc.My.Salesforce.com to access the org.