At the moment my domains are with my webhost and i point them to a folder. If i move to another host and have the domains with a domain reg company, i'll have to forward them.

Is forwarding any different to what i'm doing now? Also if i forward someone to say test.com/index.php and the folder on my space is myspace.com/test/index.php, will the domain when i forward it, show test.com/index.php? As i wouldn't want it showing the real path.

Forwarding is very different from hosting your domain with actual disk space. Why not move to a host that allows mulitple domains at no extra cost?

you can always URL frame the domain to the webhost

or use the addon domain feature with cPanel if you're webhost uses cPanel