Is the domain a factor in determining search engine ranking?

Yes it is. So how do you choose a good domain name? Use your keywords in your domain name.

Domain Naming Tips Example.

If your business is about selling games for pocket pc, the first is to check out the keywords people use to search for games for pocket pc. A quick look at http://inventory.overture.com/d/searchinventory/suggestion/ says one of the top searches would be "pocket pc game".

Next step would be to check out pocketpcgame.com if its available, check also for pocket-pc-game.com. I suggest you get both of these domain.

The reason for getting this 2 domains is that some search engine does not see pocketpcgame as 3 words. They see it as 1 word and therefore, the benefit of getting keywords in domain is not maximized. So getting pocket-pc-game.com is a good choice. However, when people hear about pocket pc game, they don't type in your domain with dashes. They just type all the way and thus you also need to get the domain without dashes.

So do you maintain 2 sites? Nope. The best would be to do a permanent redirect from pocketpcgame.com to pocket-pc-game.com. In this way, you won't get penalized for duplicate content. Otherwise, if you just point one domain to the other, google will see it as 2 different domains with exactly the same content.