In reply to J Brown:
I'd recommend uk2.net for purchasing a domain name. As others have said, its best to do this yourself so that you keep control of the domain.
For hosting a typical small business we site I'd recommend 34sp.com. I have no association with them except as a satisfied customer.
Many hosting plans will include access to an email server and a certain amount of mailbox storage space. Usually also a webmail interface (similar to gmail/hotmail/whatever) for sending/receiving emails.
Associating your domain with the server that hosts your website, and the server that hosts your domain's email, is pretty simple. You do this by editing your domains DNS records on the domain registrar's website. They will provide tutorials on how to do this. It basically involves entering a few IP addresses, provided by the hosting company, into a form on the registrar's website.
That just leaves getting the site developed. For a smaller business I'd recommend finding a local independent web developer who will develop and maintain the site. Ask to see their portfolio, be clear about what you want, but let them guide you. Avoid big web dev companies, especially offshore ones, unless your needs are particularly complex or unusual. I'd stay away from web development and hosting offered by domain registrars.
Good luck!