I've run across this before too. I thought if you registered a domain, it HAD to have some sort of hosting, so it would come up if someone went to the address. Apparently either that's no longer the case, or they're not enforcing it, because there's been a domain that I want that isn't hosted anywhere and the owner keeps reregistering it.
You'll probably have to contact the current owner and discuss it with them. Don't expect it to be cheap though, if they're squatting on it, then it's a good chance they think it's worth something, so they're probably going to want way more then the $35/yr to get it.