The free domain name registration that comes with a web hosting plan is some kind of a trick to keep customers on a one-year lock in period. At least this has been the strategy of some disapproving hosting providers.
I have signed up for a plan that comes with a free domain. The company has no contract period for their hosting services. But after several months of hosting my site with them, I'd experienced some down time. I wanted to transfer my site to a new host, but then again my previous hosting company would charge some $20 for domain transfer. Now that's funny for a price of $20, I could already buy 3 new domain names. Looks like I have to stick up with my host for a full year.
So, I agree, getting your domain name registered under a different company is much recommended.