Hi Jeffh,
First the easy one - Trademarks filed and issued through USPTO are 'Federal' marks so they're nationwide and not State specific. You can file a Trade Name or Mark (different) with your local State but they don't amount to much.
The process for filing online is pretty straightforward. If you have a Credit Card you can do the whole thing through uspto.gov in about a half hour if you do a bit of prep upfront. First off use their search tool and do a full search for all live/pending marks that might be similar to yours. Once you've cleared that hurdle you'll need to find the classification codes for your category. That's the thing you'll get snagged on the most. The easiest way I've found is to find a similar product to yours that's already been issued a TM, search for it at uspto then look at their classification codes. Then just use the same codes with your submission.
If you're using words in your name that can't be trademarked, but they're a component of your overall name, then you just need to specify in your application that those words are singularly excluded. So for example, if the mark you are filing is 'Florida Hot Pepper Emporium', then you'd indicate all of the words as being singularly excluded, since you can't trademark 'hot' 'florida' 'pepper' etc on their own. I forget the actual nomenclature for specifying the exclusions, but you'll see it on the web application form.
For most classifications the filing fee is $325 and that should be the only fee you'll pay.
After you file there's a waiting period, usually around 3 months before you here a squeak back from them. Then they normally hit you with a request for follow up information. It's very specific and in my experience almost always relates to you justifying your choice of categories by submitting some follow up info. They'll be very specific in what they ask.
In the meanwhile you'll be getting between 10 and 30 emails sent from Attorney companies trying to offer you their services, as well as letters in the mail. Some of these look very official and very much like they belong to the uspto so you have to be careful not to panic. These folks are like ambulance chasers. They watch for new applications then write a stock letter to the applicant trying to put the fear of God into them. Just ignore them all.
So now you have your request for more information and you'll have to decide if you can answer that on your own or not. This is the stage at which the majority of the applications fail, they often just get abandoned, usually because the applicant can't afford an attorney to help them prepare for the follow up, or because 8 months have elapsed since the initial application and the applicant has moved on to something else!! Generally you can prepare an adequate response to a request for information yourself. I've done 4 apps in the past, each requiring a follow-up, and I've had two granted, one abandoned and one in the 'request more info' stage that I may or may not complete.
As far as "Trademarks are only as good as what you're able to defend" I don't agree with that at all. They're a deterrent for people moving into your patch, they add integrity and credibility to your business, they're essential if ever you want to sell your company or brand, and they do provide you with a solid base to defend any infringement legally should the need arise.
Disclaimer - I'm obviously not a lawyer, YMMV !!