The FAQ You Requested...
What is a Domain Name and why do I need or want one?
A Domain Name is a name used to identify a business, an organisation or an individual online, and it is usually "personalised" to reflect the business or trading name of the parties concerned. It is made up of two main parts, separated by a dot - identifying-name.suffix. The identifying name is usually a product or the business name, whilst the suffix (also known as type, extension or tld) has several different options, of which .co.uk and .com are probably the best known.
Thus a Domain Name for a business called My Business Name could be http://www.my-business-name.co.uk
As each Domain Name must be unique and must be registered with an appropriate authority before it can be used, it is a relatively easy and controllable means of identification. However, it should be appreciated that there are several different Domain-Name Types (or extensions) available - .co.uk and .com to quote just two examples (see below) - thus several different versions of the same primary name can be registered, each with a different Type or extension.
If you are serious about having an online business presence and intend trading using the Internet, then an online identity in the form of a Domain Name is virtually essential.