No registration xxxcams
Nowadays, the purpose of the registration is to notify the immigration authories about the place of your stay while you're in Russia.You would think that the Landing Card, which you fill out on the plane before you arrived to Russia would suffice, but no, the registration is a totally different thing and should be done separately.
However, in 2007 the laws have changed and now you get a special piece of paper that confirms your registration has been submitted.Also, below is the migration form which you can use to fill out so it'll save you some time.The registration can also be done directly at your local UFMS (police station), but the post office option is somehow better, cause you can use any post office in the country and also because the queues at UFMS are usually much longer.It means that if you want to be more flexible in choosing where you live, it's better not to get your visa through hostels, because then you'll be obliged to stay there at least for one night, According to the new rules any Russian citizen with "propiska" (registration) can register a foreigner at his/her apartment at a local police station or any post office.The whole procedure takes about an hour (because of the forms you need to fill out and queues) and costs about €5.In this case, please, refer to the Federal Law #42-FZ "On amendments to the federal migration law for foreign citizens and aliens" from the 20th of March 2011.
This law came into force on the 25th of March and is available online on Rossiyskaya Gazeta website (the official Russian law publication).
Officially, it's not your obligation to register your visa, it should be done by the accommodating party.
However, if you don't register your visa, you may be fined as well as deported (although the latter is very unlikely) and denied from entering Russia again (maximum 5 years).
I wouldn't bother writing all that if it was ok not to register your visa. You might have problems with the police (if they stop you to check your passport).
The fines that you might pay (about $50-$100 US) in both cases are higher than the registration fee.
For example, my apartment where I have registration is in Izmailovo (east Moscow), so I had to write the address of Izmailovo Migration Service on the envelope.