You can register any domain in your control panel and view it using the instant domain alias generated. But for it to actually become active on the internet, you'll have to register that domain with a domain registrar.
You can also register a 3rd level domain for testing
In regards to creating a domain name to actually become active on the internet, can I just do it through your website? On the main page there is a link to register a domain name for $8.50.