Earlier quoted context omitted.
Same here, I was confused this afternoon when my home vpn hosted on a servebeer.com subdomain wouldn't connect. Now it makes a lot more sense, but I'm left with a very bad taste in my mouth.
Buy your own domain, preferably with a company outside the US. I use gandi.net and http://code.google.com/p/gandi-automatic-dns/ It's more expensive, but you control it.
Hardly. Any domain in the existing domain name system can be seized.