Jeff - It's the real deal. No catch as far as I can tell. The $2.99 gives you url forwarding. One small drawback is Yahoo do not provide for internal account transfers. So if you sell the domain, may need to transfer out to new registrar.
good to do for for 5 years a piece then transfer out to somewhere, else, it can forward and lock, masking puts an advertisement on it for some reason, which other registrars provide for free, the total dns control is alright.