What's the deal with them anyway. At first I thought you didn't need to register a domain (sounds more obvious to me now) from the way someoen explained it to me. So can anyone just give me a run down of how it works and hopefully make things more clear?

Basically, a domain name points to a specific computer connected to the Internet. Every computer has a numeric address; a domain name points to that address, so it's easier for people to remember. You'll probably want one if you have a website.

Parked domains are domains that have been bought by a company that specializes in re-selling domain names, with the goal of re-selling them to other people.

As for add on domains, if you purchase hosting from someone that offers this, you will be allowed to add on a X amount of other domains to your account. And I think it adds as a file in the actual root folder. It more or less depends on the Hosting Control pannel your host uses.

So you will still have to register right?

Yes, and pay the money for it.