I recently got a reseller hosting account.

My hosting company provided me 2 nameservers,

ns1.companyname.com ip2
ns2.companyname.com ip1

But my domain registerar(godaddy) only supports name servers without ip only. Also he is not able to resolve this ns1.companyname.com

I wonder is this the standard way of setting up the name servers ?

Do you have ns1.companyname.com pointing to the IP address thru your control panel? If so, it is already set up. You just need to enter ns1.companyname.com & ns2.companyname.com in godaddy.

You are not looking in the right place in your godaddy account.
You want to look for Register name servers, not the normal field where you enter name servers for a domain.
There you will find appropriate boxes to enter ns1.yourdomain.com = IP 123.45.67.89 and the same for ns2.
Poke around in your godaddy account until you find the link. It's in there.

Click on the Domain name - and then Set Nameservers. Now click on the Domain Host Summary - lower right.

Thanks for all the help...this forum really is very useful

Sorry it took me longer. When DDT said that - it clicked. :) I had ran inot the same issue a long time ago