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It appears the only way to use the email forwarding feature is to specify your domain in the website forwarding as well.  i.e. forward your domain to itself?  It won't let me enter an email address to forward email to unless I also enter a web url to forward the domain to???  Is this the only, or correct, way to setup email forwarding and keep the domain parked? Thanks.

Some of our customers use email forwarding when they are forwarding (or stealth forwarding) their domains to another URL.  Our full feature list for domain names can be found here:

Domain Name Feature List
http://www.dynadot.com/domain/about.html

Why else would you use email forwarding?  Why is there even an email forwarding feature in the admin if it can't be used?  What needs to be done with the domain in order to get email forwarding?  Thanks.

Unfortunately, you cannot use the email forwarding feature if your domain is parked at this time.  We have email forwarding for parked domains on our feature request list, but I do not know when this will be implemented.