Hi I have been asked to set up the domain name and hosting as well as the website itself for a client. I was wondering what is the best way of doing this. As I don't really want to pay the recurring charges.

Then don't. I would get the clients address and CC#. Make the payment for him under his card. And charge him a fee for doing so. Then everything is under his name and you don't have to worry about it. If it was me I would pay for the domain and hosting them change them extra each month for my services. I would also bill a month ahead, then if they don't want to pay I can cancel all services and not lose any money and they will have 30 days to find a new host and registrar. It is any easy way to make money with no hassel.

I agree. I usually have clients do that on their own. I'll walk them through the process or give them written instructions. If the client insists on you doing it then get their credit card # and other contact info.

Have a reseller account or affiliate program with one of the domain name registrar and earn on the commission.

Suggest them do that personally. That is private and that better stay away from that

I suggest you get a reseller account if you are going to register domain names for clients. I use myzoz.com as they have cheap rates for .com domains and it is very easy to transfer domains there.
I also suggest you charge your customer upfront for the domain then after you complete the work on the website transfer the domain to the client and make sure to tell your client they have to complete the domain transfer or they will loose the domain name when the renewal date comes next year. If your client do not complete the transfer the domain will expire and you do not have to pay recurring fees.

Reseller account is a good option! around 150$ to 250$, you can get a good reseller account!

Make sure that in reseller account you are getting feature like private nameserves, free templates, fantastico installer etc.