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Using Magento's terminology of Website & Store, can I create 2 stores within a single website and use different top level domain names for each store?

Or must I use separate websites if I want to use different domains?

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You can have 2 separate domains for 2 store views under the same website.
But you have to be careful to set Use SID on Frontend from System->Configuration->Web->Session Validation Settings to Yes. You don't want your customers losing session just for changing the language.

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