We know that it is a very good practice to use Virtual Hosts on your local machine to develop websites locally. Using paths like http://localhost/site1 are not only bad looking, it gives problems when you reference files, images, ... relative to your domain. It also helps you get better organised.
There are some steps to undertake in your systems hosts file and in your apache server in order to get these virtual hosts running. Just google or Bing for a tutorial.