Quote Exalted Wombat:
This sort of thing is by no means an inevitable result of hosting multiple sites on the same webspace.
For sure - as NeoK said, it's the result of a dirty hack, and by no means inevitable.
web forwarding, they now also offer a Domain Mapping facility.
Marketing terms - presumably made up by 123reg and/or friends. They no doubt correspond to specific real-world configurations, but I'm not sure I'd like to guess which...