There's a lot of bad stories about 1and1. Just do a search and you'll find many many many many many stories where people sign up for the $1 domain, then get rebills for full price when the renewal is due and get harassed and threatened if they don't get paid even if you really want to let the domain expire. $1 for a dotcom is really cheap, but it would be a good loss leader if they really are running a renewal auto-rebill scam.
I'm sure it's possible they have competitors creating a massive negative campaign against them, but there's just too many scam alerts for me to take a chance. At least using any real info.
If you use a fake identity and pay with prepaid cc then maybe, but even then you'll be using those domains for your own campaigns. $1 is a hell of a deal for a dotcom, but if you really want to use them I'd say be sure to search for the horror stories so you can at least protect yourself enough to not become another one.
Not saying don't do it if you know what your doing, but just really make sure you REALLY DO know what your doing.
Good luck.