You can use free nameservers, that wil help you out. If you do not have a static IP. Everytime your hosting IP changes. You will have some downtime.
Here is more information on that.
http://www.thefreecountry.com/webmaster/freedns.shtml
Registering will reserve the name for you. It is yours until you no longer pay to own it. Otherwise, anyone can use the unique name. Plus someone has to have a name on the numbers or letters. It is not the wild west. Otherwise, there will be 50 jillion entries for one name and you will not know where to point your broswer to.
Think of it like this. If somehost.com was owned by 4 enities. Which one would get the traffic? Plus if there is subjects on the site breaking laws. Someone has to be in charge of the name. To fix it or take the fall. Someone has to own the name. Just like a car tag in a simply put way.
Tip, be careful looking for names. Only research for a name availablity
when you are actually going to purchae it. Otherwise you might find out it is taken when you are ready to buy it.