But can you tell me what the heck this command do to my system and what do I need to do to revert it?

Seems from Hardy's logs there is no multicast address associated with your loopback network, so this command adds it. It's not a permanent change: a reboot would get rid of it.

Are you implying my machine is configured wrong?

Yes I would consider it "wrong", I guess this is maybe arguable but it's a standard route. I never had to set it up "manually" before.

Now the big question is what do we do about it. Being able to start tests without fiddling with system settings seems like an important requirement to me, I'll check with Bela why this wasn't a requirement before, but there is the possibility of course that he needs it to be like that.