We have just added API version 2. You can search for, register, and delete domains like in the original API. In version 2 you can also renew domains and set nameservers.
Actually, my experience is that you can NOT use DynaDot to change a dot address for a name server once you have created it.
I've tried something simple like swapping the dot addresses between NS1 and NS2 -- that hasn't propagated in a week even thought Dynadot lists it as changed in my account.
I recently tried assigning completely different dot addresses to an existing NS1 & NS2 pair registered with DynaDot (we changed servers) and that has yet to propagate -- and I strongly doubt if it will.
I haven't tried completely deleting the nameserver listed in my account and recreating. It's quite a hassle to go back through the domains that had used the deleted nameserver.
I really don't think this "feature" is ready for prime time.