[IANAL - do your own due diligence before forming a company]
Creating an LLC is fairly simple. Find your state governments IRS or Treasury website and they should have a sign-up form on their site. The fee varies by state but should run you around $120 or so - I think $800+ in Cali.
You pretty much just pick a name that isn't used (they'll probably provide a search so you can verify), list address info, pick a category of what your business does, and list a "board of directors" (yourself). My state had some bullshit Rush Processing fee - like $10 - if I wanted it in 7 days or less but I didn't choose that option. I filed and paid online on a Saturday and had my articles of incorporation on Wednesday.
For taxes, a single person LLC is pass through taxation. That basically means you file the same as a sole proprietor does - everything goes on your personal tax filings and you get to itemize deductions.
For legal protection, if you're sued they can only go after the amount of money that the LLC has. As a sole proprietor they can actually go after your personal assets too (house, savings, etc...).
I believe that an S-Corp is the best for tax purposes - you can pay yourself a set salary and the rest you can pay yourself as Dividends which are currently taxed at a much lower rate than earned income. Again there's plenty of research out there on this stuff, I'm just trying to remember what I read 2 years ago when I created my own LLC.
