When I designed my website I used 123 reg for our domain. Are you having someone design it for you or are you using one of the web designer sites yourself? My BIL has just signed up to one and his domain came free with it.
I've only done mine for 2 years, I think we can buy it again after that, I bloody hope so anyway!!
You usually get a renewal reminder from whoever you buy it from before it's due to expire, giving you the option of renewing before it goes back onto open market. It should be fine to uy the domain names from wherever you can ge them cheapest (and shop around as there can be quote a difference). You should be able to transfer them free of charge to wherever ends up hosting your website.