Just wanted to know what is the billable website feature and do I have to buy additional sites if i want to allow my user to create a site from frontend and allow them to be admin of the site they created. the site they create will be a subdomain of my url.

Billable website is used when you want to executure script during the creation of website or when you are selling the service to create website from the front-end.

If this case you will need to execute scripts to process the ordering and therefore you will need to enable the "billable website" functionality.

To works with billable website, you need website quota that can be ordered when you go in the "settings" menu.

what if i am not selling the service on the frontend lets say i what to create a system where people can get their own free blog like blogger.com do i still need to by billable websites.

And finally the scripts i need to run if i wanted to charge for that type of service is that built in or do i have to create custom script of find a compartable system

If you don't have to execute any additional script (that seems be your case), you don't need to enable the billabe website.
You can use the procedure as described in the tutorial video 13
www.jms2win.com/tutorial#jms12x-13

As long you are creating slave site in a subdirectory, this will not require any additional scripts.
If you want to setup automatically a hosting server configuration or proceed with payment or whatever else that require additional script execution then you will need billable website functionality.