If you want to make wordpress permalinks on Godaddy hosting, you can do it in 3 steps:
1.Make sure the type of Godaddy hosting you buy is Linux, Godaddy windows hosting can not support wordpress well, although their windows iis7.0 can supoort php5, but i suggest you buy Linux hosting to host your wordpress blog.
2.WordPress Permalinks settings. If you take a look at your address bar as you click through a new WordPress website, you will see urls that look like this:
Clearly, there are many problems with this url. First, it isn’t search engine friendly. And second, it is hard for any visitor to remember. So, you can create urls that look like this:
3.Wait a moment. Some one find wordpress permalinks is not work after setting, do not despair, it will work wait a moment. why need wait? When you update your permalink structure, WordPress creates something called an htaccess file. This file saves certain configuration settings for your link structure. However, it takes GoDaddy about 30 minutes to recognize that this file has been created, and start following the new rules within it.
Now is all ok.
For more information on using and customizing your permalinks, see the WordPress permalink documentation.