I would suggest that you keep at least several months worth of expenses in a liquid short term savings account - such as ING direct. I have an account there myself and have had no problems with it. The rate they offer is the rate they give - no minimums or monthly fees. If you do need to withdraw money, however, give yourself a couple of days to recieve it.
Once you have your short term savings set up and funded, I would then recommend starting to concentrate on other investments. I've seen quite a few people jump the gun on long term investing and end up needing the cash way ahead of schedule - and paid for it in taxes and penaties.
For more opinions on ING, you can take a look at
this thread
Hope this helps
