What steps do I need to take to use SSL? I have googled, but the results just confused me more. I got some results stating that you can get free certificates, while others said you have to pay. I also read that I would need a dedicated IP address, is this really so?

Some of the information you have is correct.

To have an SSL certificate in shared hosting, you need:
1) purchase an SSL certificate. Don't get the free ones, they are getting rejected by the new IE7 and it "recommends" you to not go to the site

2) You need a dedicated IP with your shared webhosting account.

3) You need to generate the Cert Request from your webhost. Then submit it to the SSL company that is selling you the Certificate.

4) Import the shared certificate into your webhosting account.

That's about it.