This is a source of much confusion to people new to setting up websites as well as to many experienced webmasters. Each of these services has a different purpose and is billed differently. Together, these three components form the chain that links a domain name (like example.com) to a web site (like example.nfshost.com).
Domain Registration is the process of reserving a domain name with a central authority (called a registry) so that no one but you can use it. Domain names are of the form example.com as opposed to host names (aka site aliases), which tend to be of the form www.example.com. (You can use example.com as both a domain name and a site alias but doing so has certain hard-to-understand limitations, and we do not recommend it.) Domain registrars act as intermediaries between you and the registry, and they charge a fixed annual fee for this service. We provide domain registration services for the most common generic top level domains (aka "gTLDs").
DNS or Domain Name Service is used to tell the world what you want to do with your domain name. Most commonly, it is used to create a hostname. Most hostnames have another word attached to the domain name like www.example.com. Each hostname corresponds to a website. It is possible to have more than one hostname per website, but a hostname can only refer to a single site. DNS links this hostname to your website, so when people want to visit www.example.com, their web browser can find it. This is a little like calling directory assistance to have them find a phone number based on someone's name. We offer low-cost DNS service that provides this functionality.
A web site refers to the storage and retrieval of your actual web pages. After a web browser has checked with the registrar to see that your domain name is valid, and checked with DNS to find out what web host has your website, it goes to that host to retrieve your web site's pages. This is the simplest of the three, and the only one that can work by itself: if you don't have a domain name registered or DNS service, you can always still refer to your site by a name like example.nfshost.com.
For more information about domain registration and domain name service (DNS), please see those sections of our FAQ.