After thinking about this, it really sounds like someone set up a proxy of your site. Here's how that works:
They publish a domain -- and publish links to "their" Web site. When anyone requests a page from their domain, their server requests that same page from your server, and sends the results to the original requester. So, to the original requester, it looks like your site on the other domain.
This can cause serious problems with search engine ranking, since your site and the proxying site are 100% duplicate content.
I also thought that may be what was going on, especially as the domain names that were showing my site were really weird, like plucked out of thin air domain names
ipinokaran dot come and durmakalavedo or something
I couldnt seem to get thorugh to anyone at my hosts as to why I was so concerned about this, but like you say, terrible for SE and I had also read about this domain hijacking and as such it had crossed my mind also this was what it was.
Luckily it showed up in my stats...sites that refer to this site section and hence I spotted them as i often click through to sites referring to mine to take a look, and i saw these 2 sites that appeared to be linking alot to mine, so I was lucky, and was able to change my IP before..I hope..to much damage was done.