Hey, it's not that silly of a question! Apartment rentals are typically for 6-month or annual leases where you pay each month. Tivo service is often contracted at lower monthly rates for a one to three year commitment. Cellular phone service is paid monthly but you're often under contract for one or two years with a cancellation penalty.
At DH under a monthly plan, your payments are monthly and your contract is month-to-month. I think this means you can cancel anytime during the month but before your next rebilling. If you do change your rebilling, I think that really means you're signing up for a new plan so you get switched over to the Happy Hosting plan from the Crazy Domain Insane plan or whatever you had before so it would be $10.95 a month.
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They're Dreamhost coupons!