Hey Stove, welcome to the fun!
Well, I don't know about any laws in your state but for the bike, I'd also go with Dax and then get a sprocket adapter for your hub at pirate cycles or from a guy named "Geo" found in the Shop & Swap....don't know if he's got a site up yet though.
I think that if your state has moped laws that follow bicycles, you may have to put lights, and blinkers on it. Where did you see the one you saw? Was it in your neck of the woods? If so, if he's riding his "stock" you should also.