Say you're playing around in the panel and add "mystupiddomain.com" to your hosting, but don't own that domain name. Someone comes along, registers "mystupiddomain.com" and tries to add it to their hosting here. Since you already added it, the system won't let someone also try to add it. Whatever the reason, submit a Support ticket so they can track it down.
There are those two choices, but I'm not clear which one you'd like best:
Mirror - you've set up Site1.com, but want Site2.com to be the exact same thing. Site2.com (the mirror) will access all of your Site1.com files and data, but show Site2.com in the address bar.
Redirect - Someone types in Site2.com, but gets immediately bounced over to Site1.com
As for your whine about having to pay twice for hosting, you get unlimited domain hosting here. Sure, you have to pay that $10/yr to register a domain, but you can host as many websites here as you'd like under your hosting plan.