Yes it is included. Are you familiar with Java development?
Where do I write the code? Textedit? When I try to save it as a .java, it won't let me and says i need to save it as .rtf Please help!The book should give you some hints and details. In my experience, books on programming generally take you through the steps required to setup a development environment. So I don't confuse you, I'll let the book do the talking there.
You don't "see" the Java development kit - it's a set of command line tools. In other words, it won't be something you'll see in your Applications folder.