Some Web Hosts require you to transfer your domain registration to them as part of their hosting deal. This is usually so that they can offset their cheaper hosting fees with overpriced domain registration fees (often $20-$70 per year!).
However, in reality this is not necessary. To switch web hosts, all that is required is to change the nameservers listed against your domain to those of the new web host.
See the article
How do I change my nameservers? in our knowledgebase for details on how to do this.
