Just to be contrary (I can't help it, it's in my nature), I have set up a Windows-NT4 network that does not use WINS, and only uses DNS. Oddly, the general direction of Win2K AD, etc. seems to be leaning that way.
DNS is used to translate human readable names for systems and services (e.g., www.techrepublic.com) to a numeric network address (e.g., 64.124.237.165). There is an extension called Reverse DNS that allows a lookup of the name, given an IP address.
DNS is obviously the name resolution protocol of choice on the Internet.
It can also be used "internally", quite easily. You just need to define a "root" domain (it does NOT need to be "mycompany.com" or anything like that, if you are just using it internally - it could simply be "mycompany").
A key concept of DNS is that it is hierarchical. You've see that on the Internet where you have "www.cisco.com", "ftp.cisco.com", and "cio.cisco.com". Note that the stuff after the domain name (the path stuff with the slashes) is NOT part of the DNS hierarchy.
Internal DNS structures are often much deeper. Each level adds a descriptor and a "dot". For example:
hp3si.server1.sales.timbuktu.emea.mycompany
This structure has "mycompany" as the root. This organisation seems to break their company up by global geographical regions, since the next level up (or is it "in"?) is "emea" (Europe, Mid East, Africa). The next level suggests that the office is in Timbuktu. Whatever device this is seems to belong to the sales office, and is running off of their server known as "server1". Oh, and finally, it looks like this is a printer (an HP3Si, apparently).
If you're hooking up your netowrk to the Internet, you would want to use properly registered domains, and so on. So the above record would read:
hp3si.server1.sales.timbuktu.emea.mycompany.co.uk
Or something similar.