We Hosting Problem

Following from my previous thread, I decided to go for webhost4life as my web hosting provider. Unfortunately I am already starting to regret this decision. I got the web space OK but the domain registration process is made more difficult that it needs to be. They seem to be using Godaddy or someone else to handle it but they dress it up to look like their site. But what annoyed me was the fact that after I went through the registration process, they cancelled it. They did not say why, it was simply an automated email that told me. When I emailled to ask for an explanation, I received more automated replies but nothing else. This lack of support is very disappointing. I could call the helpline, but I don't want to have to call the U.S from here especially as I only have a mobile and no landline.

So what I want to know is, can I register the domain through someone else e.g. 123reg and get it to point to my web hosting? I don't understand why such companies offer a service for around $8.99 to transfer domains if it isn't necessary for what I want to do.

My knowledge of this kind of thing isn't that great so I would really appreciate it if someone could explain it a bit.

Cheers.