You can get the Walkera #4 off ebay for $80, thats with FMS and a flight sim cable, plus training gear, some kits even come with crash kits at that price.
You really got gouged from trend times. It sucks, especially if you're new to the hobby, when you get disreputable companies like this selling you cheap products that are rediculously overpriced to those who simply don't realize it. Many people are afraid to use ebay, but the feedback system ebay has is one of the best features of any online system, and tells you right off the bat wether you're dealing with a reputable person or a scammer. I buy almost everything off ebay if I can, and have rarely been burned by anyone aslong as you research your products first.
You can look at this as a lesson.. an expensive lesson, maybe, but you won't make the same mistake twice, that's for sure

. It's also a good idea to either do a search, or make a post on these forums in the future before purchasing anything from unknown websites, as you can really save your self alot of money and headaches.
It's good to hear that you DID get your helicopter, anyways.
As far as the flybar, if the leading edge of the rotor (the straight edge) is at a perfect 90 degree angle with the flybar, the whole head assembly should stay straight if it is balanced. If the flybar lops to one side, it's probably unbalanced.
The weights on the flybar head are there to slow down cyclic response, NOT to balance the head. Moving these around will cause you more trouble. To balance the flybar properly, it needs to be loosened from the rotor head and perfectly centered. Typically, you need to have the exact same ammount of distance between the flybar assembly base and the paddles on each side, however, if the paddles them selves are not balanced (due to moulding mistakes, etc.) this may not work, so you may need to offset one side to achieve a proper balance. The only way to know for sure is to play with it till you find the happy spot. This should help alot with shaking and vibrations. You will need small allen keys to move both the flybar weights and loosen the flybar so you can move it around. Flybar weights should be at an even distance on both sides so as not to off balance the rotorhead. These make the helicopter more docile in flight. If you prefer more snappy and quick movements, you can remove them to improve cyclic response.
Another problem with fixed pitch helicopters is that because of their low head speeds, the "loose, but not too loose" mentality for the blade fixing doesn't work as well as it does on CP birds. Personally, I put my blades as tightly as they will safely go, then align them to a perfect straight 90 degree angle with the flybar before each flight. This has solved all major vibration problems for me and my helicopter remains very steady in the air (not even a slight vibration of the landing skid can be seen, as is common with so many FP helis).
There are many posts in these forums on setting up and configuring these little birds, just be very thorough and take your time with them, and you will eventually get something that can hover and fly around decently.
No micro will ever be easy to fly because of their size, but they CAN be flown, they just require a huge ammount of concentration and quick reflexes