When you register your domain, you need to provide the information of your Name Server If the Name Server is in the domain you are registering, you will need to provide the IP address for your Name Server.
e.g. You are registering domain example.com at godaddy.com, you will need to provide the name server
- If you decide to setup your own name server, ns1.example.com, you need to provide godaddy the IP address for ns1.example.com
- If you decide to pay ultradns.net to use their name server, you just need to give ns1.ultradns.net to godaddy
hope it's clearer
For details, see http://en.wikipedia.org/wiki/Domain_Name_System#Authoritative_name_server
When domain names are registered with a domain name registrar, their installation at the domain registry of a top level domain requires the assignment of a primary name server and at least one secondary name server. The requirement of multiple name servers aims to make the domain still functional even if one name server becomes inaccessible or inoperable.[10] The designation of a primary name server is solely determined by the priority given to the domain name registrar. For this purpose, generally only the fully qualified domain name of the name server is required, unless the servers are contained in the registered domain, in which case the corresponding IP address is needed as well.