I don't register with GoDaddy, either. It's not just about hosting.
GoDaddy has been known to do things like "repossess" a domain name at the request of a third party (like MySpace in one famous incident) when there has been no wrongdoing on the part of the domain registrant, then offer to give it back if the registrant pays $300 in "penalties".
Check out the story for NoDaddy -- which used to house a lot of horror stories about the bad things GoDaddy has done to its customers:
edit: I actually use pairNIC for a lot of domain registration. So far, the company seems like a pretty stand-up, honest, low-key, substantial operation.
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