I am aware that one needs to purchase a domain name for one's website. But anyone explain what is web hosting and how it is difficult from buying a domain name?

definitely keep your domain name and web hosting service separate. It gives you a lot more control in the event you ever need to change one or the other.

The domain name you'll definitely have to purchase. The price can be anything from $10 a year to $35 a year... be aware that the lower-priced providers buy domain names in blocks, and if you let your account expire, they'll probably hold on to the name and if you need to use it someplace else, you'll need to buy it back from them at a premium -- unless it's your legally registered trade name, in which case you might be able to send them a nice and legal "cease and desist" letter.

The real challenge there might be coming up with a good domain name that hasn't been taken already. This article might help...

http://www.hesitantrhino.com/build-your-...

As for the web hosting, you can actually get that for FREE... and with no advertisements either, if you know where to look...

http://www.hesitantrhino.com/free-web-ho...

Then, if you ever need to "upgrade" your web hosting to more bandwidth, more storage, more features, etc... all you have to do is point your domain account to the server address of your new web hosting provider.