Hi I have registered a domain name with one company, but my web host company that i want to go with want me to transfer it to them, why is this and is this vital?

If the other company is registrar then I'd advise against transferring it, it'll probably cost you money. If your domain is with a host who does domains on the side then move it as you might not have any control over it if you got it with an old host.

Andrew

It is highly recommended that you keep hosting and domain control seperate!

most end users keep their domain with hosting companies because its free to register a domain via hosting company.