i've been using MVPS hosts file for years too
i've installed pfsense yesterday and i'm trying new stuff currently
i just included the MVPS list (domains only) to the "/usr/local/www/packages/dnsblacklist/blacklists/ads/domains" file and it works fine.
furthermore i've changed redirection to localhost/127.0.0.1 in dnsblacklist.php because i really don't like sending any information more than necessary to google
is it also possible to use pfsense's /etc/hosts file for blocking those domains? i guess it wouldn't eat that much memory (correct me if i'm wrong) because dnsmasq simply looks up the /etc/hosts file and sees the localhost redirection entries and forwards that to the client instead of holding everything in memory (which is limited on my alix board).
i'm new to pfsense and simple editing /etc/hosts didn't work because something always overwrites the file (i guess it is the "Register DHCP leases in DNS forwarder" setting).
just found /etc/inc/system.inc and changed function system_hosts_generate() to append my host list to /etc/hosts
skipping DNS blacklist package.