A domain name pointer is simply a domain name that points to another web site, known as a domain redirect. For example, the following domain names: www.example.com and www.example.com.au will take you to the same web site. That is because www.example.com is a 301 permanent redirect to www.example.com.au. You may use 301 permanent or temporary redirects because they are search engine friendly.
Domain pointers can be handy for several reasons. One popular reason to own a domain pointer is to shorten or improve your web site address. For example, you may have a free web hosting account with a long web address and you would like to project a more professional image with a short domain name. For example lets say this is Mark's web site address: http://www.example.com/memberspace/marksink/. Mark doesn't like this cumbersome address so Mark buys the domain name: marksink.com. Mark then has Directory One point this domain name to his original site. Now he can use the marksink.com address on his business cards, emails and advertisements.
Also, businesses often find that they profit from owning more than one domain name or domain name pointer. When a searcher can not remember a domain name, they will often type in likely domain names trying to find the site. Because domain names are cheap, you can easily buy several domain names similar to your main domain name, all of which refer to your site. For example, if your site is named pool-cleaning.com you may wish to also buy pool-cleaning.net, poolclean.net, and poolclean.com. If assigned as domain name pointers, all of these domain names when typed into a browser, would refer to your site.
Other uses for domain pointers include using them to track marketing campaigns like putting a specific domain name on a certain advertisement and tracking how many hits are received to that domain name, or to target a specific market segment, i.e. using separate domain names to focus on separate aspects of a business.