As for multi-year buys, in general, I disagree. Web Hosting is more likely to become unacceptable than Domain Name Registration, but I've seen both go bad. Right now, you've got the additional risk of bankruptcy, given the current woes in the Financial World.
Historically, Domain Name Registrations have gotten a lot cheaper, but that probably won't continue. But the multi-year discount reminds me of all the people who paid $35/year for 10 years back in the days when one year was $70! $10 is the norm these days for .com domains.
I would NEVER advise anyone to buy more than a year of web hosting, unless it was a huge savings. My partner and I have lost count of how many different web hosting companies we've been through in the last 10 years. At least a half dozen, I would guess. We are actually quite loyal to our vendors, but there have been bankruptcies, abrupt declines in service levels because of a Labour Shortage, and takeovers. But the most common problem has been Web Hosts that have not kept up with pricing in the marketplace. Ten years ago, my business partner was paying about $35 a month per Web site for very little web space and bandwidth. Today, we host 25 web sites for $8.95 per month, with more web space and bandwidth than we ever see ourselves using.
As for "Overselling" web hosting, there is nothing magical about it. Having been matching workload against computer hardware upgrades since 1974, it is easy to see the flaws in the arguments. Even if I can handle the sum total of all the monthly bandwidths I've sold to my customers, everything will grind to a halt if every customer used their full monthly bandwidth. Why? Because bandwidth usage is never evenly spread across every minute of the month. 10 a.m. and 3 p.m. weekdays are the typical peaks for business. Personal web site usage is more spread out, but still peaks. And the overnight period is pretty much of a lull.
Not overselling web space is just plain silly. If you've rapid access to more disk arrays, when you need them, and some space management software that keeps individual disk drives from getting full, there is nothing wrong with having only 25% more disk than your customers are actually using, as opposed to (summing up) their maximum allowed disk space. Even the 25% extra figure may be unnecessary, but is based on the maximum 80% usage per drive that cPanel alarms on. IBM mainframes have been running near 100% processor and hard drive usage for decades, with less frequently used files being pushed out to robotic tape libraries.
On the other hand, stay away from any web host that promises you unlimited web space, bandwidth or even web sites (domain names). Zoom got caught when they first started, with one customer on a $4.95 a month budget account, who had 2000 web sites running. He had offered free web hosting to "the world".
My point is that there is a happy medium between No Overselling and No Limits web hosting. You have to choose based on how tolerant you are of slowdowns (response time), how much money you can afford, and, most important, how well managed the web hosting company is regarding Server Performance. Better managed will always beat the guys with too much hardware and not enough brains.