The FAQ You Requested...
How do I know what Domain Name extension to apply for?
As a very rough "rule-of-thumb" guide, if you intend to trade worldwide, a .com or .biz is probably the best bet, but if you only intend to trade within your own country, then a country-specific extension like .co.uk will suffice and is likely to be slightly cheaper. In April 2006, the new .eu domain was introduced, and this is proving popular for businesses that trade exclusively within Europe and the European Union.
However, any decision in this respect will be dictated by what domain-extensions are available to register for your desired name. For example, if a business called My Product Name only trades within the UK but find that their desired Domain Name with a .co.uk extension is already in use, they may decide to register as myproductname.com if that name is available.
Consideration should also be given to selecting names with hyphens like my-product-name.co.uk, as that can be beneficial with regard to the search engines providing the words between the hyphens are recognisable words, effectively turning them into super keywords.