You will have to disable the entry in the hosts file to access the live site or use http://www.mydomain.com to access the live site.
OK, makes sense.
I already deleted the domain and installed the site in 127.0.0.1/mysite
This works well and I can now easily access both local and remote sites.
If only I could find a way to easliy push database changes from local to remote and vice versa then it would be a perfect development setup.