1) The registrar has a DNS server. It tells the main (called top-level) DNS server owners (for instance the .com) to forward all requests for yourdomain.com to their DNS server. You can also do this directly with the owners of the top level domain (ICANN in the case of dot com I think). But then you need to run your own DNS server.
2) They don't, see number one.
3) They pay a fee to the top level registrar.
4) Depends on your registrar (possibly country), but with proper registrars you do (however read the contract with your registrar).
