to beat a dead horse further…
– the range of possibilites on that screen is pretty wide. The exact outcome depends on what’s typed in the domain name box at the top. Some tld’s have different annual fees and therefor different responses about what’s free or can be free vs what’s not. Until you enter in the domain name it can’t tell you which circumstance you fit into.
and most importantly:
– If you DON’T continue with dreamhost after the free trial, that domain is NOT lost to you. You can use that domain with ANY host. Change the nameservers to use another hosts DNS and it’s still all yours exclusively until the expiration date.
Either way… You DO sign up for dreamhost hosting, it becomes free as part of the hosting package, or you DON’T sign up for dreamhost hosting you use the domain with some other host.
I agree the difference between HOSTING and DOMAIN REGISTRATIONS are often not clear to people doing it for the first time. One other thing you may not realize yet is that dreamhost (as does any domain registrar) pays a 3rd party for that registration. They would be out of business quickly if people could abort free trials to get free use of a domain elsewhere for a year without paying for it.