DNS domain

[omarmdx () yahoo co uk]

I don't really understand the DNS domain bit in the installation process. I'm using my ISP DNS, what should I put in 
the section where I'm asked to enter the DNS domain (the default id localdomain, and the other part is where I'm asked 
to enter a system hostname (the default is localhost).
One more thing, in the section where we're sked to provide an email address for alerting, can I put an external email 
address like yahoo or hotmail?

Thanks in Advance for your patience.

Omar