Yes.  Flu is very contagious.  Many people will be exposed, many of them
will become ill, and some will become seriously ill.

You develop immunity to a specific flu strain when you're exposed to
it.  This immunity should protect you for some time (years) against
that strain, and give you some resistance to related ones.  It's not a
lifetime immunity, but it works reasonably well in the short run.  This
is independent of whether you recover with or without the help of
antiviral drugs.

Flu vaccines probably don't give you as good or as long-lasting an
immunity as actually getting the flu, but they are good enough to be
the difference between getting ill or not getting ill, or getting a
mild case instead of a serious case for most people.  Also note that if
enough people are vaccinated, there won't be enough susceptible people
to spread the virus, so most people will end up never being exposed to
it.  This is called "herd immunity" -- susceptible people are
surrounded by immune people who can't infect them.  It's the best
method to protect the most susceptible:  the chronically ill and the
elderly, who don't develop strong immunity from vaccines, and are most
likely to become seriously ill or die from even the annual outbreaks of
relatively mild influenza strains.  It's also the best method to
protect a population from any serious disease, since no vaccine is 100%
effective.  This is how smallpox was eradicated, and how most childhood
diseases were reduced to near insignificance in developed countries.

Note that while a pandemic could be disastrous, it's not the end of the
world.  The WHO keeps records of laboratory confirmed cases, and as of
22 September, there have been 115 cases and 59 deaths in almost two
years.  That sounds horrific until you realize that probably well over
a billion people have been exposed to the virus, and only those sick
enough to be hospitalized, and identified as potential victims of avian
influenza would be tested.  When there was an outbreak of avian flu in
Hong Kong in 1997, with similar mortality rates, poultry workers were
tested and about 10% of them had antibodies for H5, without having been
seriously ill.

The World Health Organization has been doing a great deal to avert
pandemics.  If this strain doesn't jump the species barrier, it will be
due to their efforts, and if it does, there will likely be "only"
millions rather than tens or hundreds of millions of deaths, due to
intense surveillance and early development of vaccines.  As a
background, the 1918-20 pandemic killed about 50 million worldwide, and
about 70,000 people die of flu annually in the US.  The brief SARS
epidemic a few years ago demonstrated both the effectiveness and flaws
in emergency plans, which stood up very well for that less contagious
but more virulent disease with no vaccine or effective treatment.

If it's your own health, and that of your friends and family that
concern you, note that most deaths will be in poor countries, where
chronic malnutrition and chronic illness from malaria, tuberculosis and
AIDS, poor and crowded living conditions and limited resources for
public health measures will make an epidemic harder to control and much
higher in mortality rate.

Note that a lot of the above is my opinion, which likely isn't worth a
lot since I'm not a medical worker, an immunologist nor an
epidemiologist.  If you want more authoritative information, I suggest
the WHO web site, www.who.int, especially the sections on avian
influenza and pandemic preparedness.