I was facing the same issue here, where my hostname was getting arbitrarily inserted into the prompt.
The issue, i found out was the ".shrc" file in the home directory. This file pulls in another file "/etc/shrc". If you have a look at "/etc/shrc", you'll find it performs a lot of tomfoolery with PS1 (including inserting the hostname), editor keybindings, etc.
I didn't find anything useful being done by these scripts, so i renamed ".shrc" to ".shrc_old". That gave me back the prompt i wanted (without the hostname), and as a bonus my keybindings of the editor to vi also got picked up instead of being ignored.
FYI,
$ uname -spr
NetBSD 5.0.1 x86_64
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