1ste Q :

When registering a domain, it gets binded to nameservers, wich you can change.... This is possible by running a DNS service (eg mydomain.com/w00t.php will be the file on your server called w00t.php)

With fowarding, they mean the type of fowarding know in META HTTP REFRESH (redirect to your server) or Cloaking (you can browse you files on your host, but the titel and adres in the adress bar wont change, it will apear as http://mydomain.com)

I hope I helped