encyclo - 8:09 pm on Jan 9, 2010 (gmt 0)

Your host is twisting the meaning of "hosting other sites" - a masked domain is not proper "hosting" in the sense most would understand it - the files do not resolve directly under the masked domain - it's just a trick.

If your current host is unable to provide a solution where your site2 domain directly serves the content (ie. not via a frame), then I would look to another host.