When you buy a car in California, you get a free ride on whatever is left on the registration. If the registration is due to expire very soon, DMV will make you pay for a new year, but if there's some time left on the registration, you just pay a transfer fee and you get the remaining months for free.
Probably the registration did not actually expire, but the dealer did not put the new sticker on in OCT/2010, or the previous owner might have just given the dealer the OCT sticker to put on.
So you didn't pay for those 7 months, and so you don't really have a complaint here--at least not as far as I can see.
Dealers don't have to re-register the car when they buy it--they just carry the previous owners' reg.
If you feel there was an incorrect calculation on your fees, you can go to any DMV office and have them check it over for you.