To clean this up, here is the rough process:
0) You type something in the url field and the browser (Safari) parses it to get the server name, in this example "bobsHouseOfFish".
1) The browser asks the OS if it knows the address of a server "bobsHouseOfFish", the OS looks this up through its methods. On MacOS X this includes things like NetBUI, OpenDirectory, ActiveDirectory, Bonjour, and most importantly for this conversation DNS.
2) Your DNS servers should not be able to resolve "bobsHouseOfFish", and should respond that it does not know, and then the OS should pass this along to the browser.
2.1) If you have any "search domains" defined for this interface they should be tried (so if you have "example.com" defined, then it should try DNS for "bobsHouseOfFish.example.com".).
2.5) Completely counter to the standard some ISPs have started returning a pointer to a search portal that they use to generate more money by advertising to you (or selling you to their advertisers). This practice sort-of works for web browsers, but completely breaks lots of other services. If your ISP starts doing this complain loudly, and threaten to leave them.
3) Since its first try did not work, the browser is now free to try other things, Safari will, by default in the US, try putting ".com" at the end, and trying the search again. If this again fails it will try also putting "www." in front and ".com" at the end. If this then fails to resolve to an IP it gives up, and tells you.