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Never accept a "free domain" or pay for it monthly, stretched over the course of the year. If you do either of those, the hosting company essentially owns your domain name and that isn't right.
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Very true!
Something else to ponder. When choosing a Domain Name Registrar, research them and read the fine print. There are a few, not many though, who may attempt to register your domain name in thier company name and let you believe that is yours.
Some registrar's may make it difficult to tansfer your domain to another registrar, I've heard of one that requires a notorized request from you and charges a $25 fee for a transfer.
So be careful and as with everything read the fine print and all those agreements that pop up, before you sign.