treasurydirect.com questions

Why government bonds or T-bills?
If it is patriotic thing, go for it, otherwise I don't find bonds to be much of investing (low return for anything quazi safe). Additionally you are locked into a set term (which might not be a problem.)
You might be able to get a good deal via an auction process, but I would suggest a CD from a local (or online bank) or an online savings account.
Currently I have an online savings account that yields 3.05% APY through HSBC.com I know etrade and WaMu and emigrants bank (as well as others) have the same thing. If you acutally want to invest (in my definition investing requires non FDIC insured account but better returns) look into mutual funds. I know there are a few out there with only like 1000 minimum balance, but don't go to risky, just an index fund or blended fund should do (S&P has averaged 9% per year sense that index was created), and sense the market is sorta low now would be a good time to get in as prices are cheaper.
Edit: A reason to invest in a fund, not a stock in the begining: I have a friend who bought $900 of stock in a corporate security company, last year stock was worth $2800 (after only 2-3years of holding onto it). Right now it is worth around $800 because that company lost a huge contract to a rival. In a mutual fund with a mix of companies you can filter that companies loss with someone elses gain to be more stable.