Sorry for the nooberific question, but it's a site I actually plan to develop real soon, like within the next few minutes. I already tried a transfer of registrar from godaddy to 1and1.com, but it's too early, so that won't work. Now that I paid for the site, do I have to pay for hosting too? If so, can I just start hosting it on 1and1.com, or is there a lengthy process?
You dont have to pay for hosting at GoDaddy. If you have hosting a 1and1, you can point your GoDaddy domain to your 1and1 host by adjusting the nameservers and IP address to point to yours at 1&1. I think with purchasing a domain name, you can get some crap free ad supported from GoDaddy, but you don't want to do that I think after something like 60 days your domain will be free to transfer (atleast, I had to wait 60 for mine).
No...don't transfer away the domain from godaddy to 1and1...that'd be a disaster If you have hosting account elsewhere, then just point the nameservers of your domain to those supplied by your host.