What to do next with my Domain!!!

Just registered a domain, and i currently have a website with a free hosting firm. Now, how can i get that domain name set to my free subdomain name?

Is your subdomain, you.subdomain.com or subdomain.com/you ?

If it's the former, you should be able to alter your DNS (for your real domain) to cname to the sub.

Some Registrar provide you with free domain/url forwarding or you can buy that cheap additional service with your registrar.

After that you can do what daemonguy told you.

There's also a free hosting company I know that provide the nameservers for their clients domain.

Using the nameservers is the best (& actual) way to do that.
However, you can also use domain forwarding and domain masking feature to make it appear as though the surfer is on YOUR domain, rather than showing the free hoster's domain.