Bottom line: use different providers for registering domains, hosting DNS servers and hosting your sites. Maximum flexibility and minimum headaches.
For those interested, this seems to be the offer link http://www.namecheap.com/products/freedns.aspx
There's also a non-profit http://freedns.afraid.org/ Though, i don't know how reliable they are.
Interesting: Once they began adding the paid accounts, the gave away free non-expiring accounts for people who have donated while the service was still free and to this day, my pro account is flagged with "Expires: never". It's cool that they continue to honor this even years after shedding the hobby-project grove.
