Hi, Jill. You are certainly right to "do your homework" before you start on a project like this. The hard part for someone trying to answer your first question is that we cannot see the actual condition of your floor. The first thing that I would do is to get a copy of The Family Handyman magazine from a couple of months back that has a long article with a lot of pictures detailing how to refinish a hardwood floor. This will give you a good picture of what is involved whether you or a pro does the work. The next step is to call in 3 professionals to give you estimates on refinishing your floor. That will give you a much better idea about the work that must be done, whether you use them or not. If you do decide to go with a pro, and everything else being equal after you check their reputations and experience, you may elect to choose one.
If you do decide to do it yourself, you will find that this is a big job. You will find that a small power sander is usually not enough to do the work or to level the floors correctly. Leaving the floor without a finish may have caused more problems than if the previous owners had left the old floor alone.