Kevin - I'm not sure what is being detected here.
The default Windows host file is empty except for comment entries and an
entry for localhost. In fact, no hosts file is needed.
I'm wondering whether your hosts file has been filled with 127.0.0.1 entries
for numerous ad servers by another anti-adware product, and whether these
entries are being detected by Microsoft Antispyware?
An entry with 127.0.0.1 and the FQDN of an ad-server will prevent the
browser from bringing up ads from that server--that's the basis for setting
up such entries.