Every bow will develop set, even the glass ones, to some extent. Your tiller and the way you chase the tiller will determine how much. Just take it slow, and make yourself a tillering gizmo. Do a search on here and find out how. That is the most valuable tool you can have. The wood itself does also contribute to amount of set, but unless its really green, it won't amount to much. You can minimize the amount of deflex by inducing some reflex into the stave at the beginning, so that when it does take a set, it really just takes out some of the reflex instead, leaving you with a straight, or almost straight bow afterward.
As far as finishing, stain is fine. Don't use a water based stain though. Use solvent based. Then a good polyurethane is fine. I'll typically use 3-4 coats of an oil finish on the wood first to soak in and seal the grain (sanding lightly in between), then 3-4 coats of the minwax spray satin polyurethane over that.
As far as tools, the gizmo first, then maybe a draw knife or spoke shave would be handy, and possibly a small band saw for roughing out, if that's in the budget. But you can do it all with the draw knife, rasp, and file.
Don't forget to post some pics, no matter what it looks like. There's a wealth of info here for anyone who wants it. The guys on this site are top notch, and are always ready and willing to help.