Yes, a good lock will save you a lot of heartache. I use a Kryptonite U-lock with cable:
The Kryptonite locks come with a guarantee (you have to fill out the paperwork) that says if your bike is stolen as a result of the lock failing, they'll replace your bike (obviously only as much as the original bike was worth).
First off, shop around. Prices vary from bike shop to bike shop, sometimes considerably. If you're going to use the bike to carry stuff at all, you'll want to consider getting a rack or panniers. If you're going to ride at night, you'll need a light for the front and a red light for the rear. You'll need a helmet. Bells are good for letting pedestrians know you're approaching; if you live in a town with a lot of pedestrian traffic I would recommend one. I just have a little dinky bell but it does the trick. If you're planning on riding any sort of distance, or riding for fitness purposes, get a cyclocomputer to track how fast you ride and how far you go. You might also consider replacing the saddle on that bike, depending on how it fits you. Having a saddle you like is important. Furthermore, learn some basic bicycle maintenance; around here Parks and Rec offers classes and so do a couple of the bike shops and the university. And lastly, get to know the bike shop guys! Find a good bike shop that you like, and get friendly. They are a great asset--use their expertise!
I love my bike, and I love riding it--it's my main mode of transportation.