I want to add another site (different domain name) to my DNN system that is hosting my main website.  I am using DNN 7.06

My Hosting company says they can provide a domain pointer add-on service to point additional domains to my primary domain's root directory.

If I go to the DNN  Host menu and Site Management then Ass a site is that what I need to do in order tio use a “domain pointer”?

What is the difference between a Parent site and a child site?  What kind of site do I need to add?

Child sites are different... 
Say you have www.mysite.com

a child site would be

www.mysite.com/child1
www.mysite.com/child2

You can server multiple root domains.. I've been doing it for years and just came back to DNN.. and have it set up with DNN7

My hosting company allows me to manage DNS records of unlimited sites.
So in my registrar I changed for the second domain to have my hosting company manage the dns (under my acct)
I then create a domain alias in my host company's DNS admin app.  Being an alias when it sees the URL for that second domain come in, it sends it to my DNN acct.      Creating the second portal in DNN is easy, as when you create the second portal it asks for the associated domain,

The second option is if you have a dedicated IP address.  You can change leave the DNS management of the second site with the registrar and point it to the IP address assigned to your acct.  In my case, my host requires that I still do the domain alias.