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How to Choose a Domain Name
The first thing you need to do is decide which registrar you wish to use. GoDaddy is a popular choice, but I don't recommend it. According to many people, they are prone to disabling domains even over false spam reports, and then charging a huge fee to reinstate the domain, even if you can prove you did nothing wrong.
NameCheap (http://www.namecheap.com) is a popular option. They have free WHOIS protection for the first year of each domain, and they have a coupon each month that lets you get a nice discount, making each domain less than $10.
I will use NameCheap as the example in this guide, because I consider it to be the best registrar. It is affordable, the support is good, and their interface is easy to use.
I don't recommend using the domain services of a hosting company. They will often hold your domain hostage and make it difficult to transfer it if you decide to leave their hosting. Always register your domain yourself, and always do it directly through a registrar.
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