The short answer on shots is yes, you will need them - typhoid, Hep B and possibly others, depending on what your travel doc says. You may have to take malaria meds as well. Tons to do on Bali from whitewater rafting, surfing and snorkeling/SCUBA to visiting temples, touring villages and attending festivals. One of the most culturally interesting places on the planet. Worth hiring a driver to explore. I did a trip report on our trip 10 years ago - it hasn't changed that much since. It is in 6 parts and you can access it here:
http://www.btf-archives.com/archive200307/11747.html

Yes as stated above if touring outside Ubud and main tourist areas which I encourage based on 4 trips. I would also get a tetanus shot, good for 8-10 years.

The Centers for Disease Control include Bali in their Indonesia survey. You can see that section here http://wwwnc.cdc.gov/travel/destinations/indonesia.htm
When I visited 25 years ago there was no question that anti-malarial prophylaxis was required everywhere. But the science of malaria is constantly changing just as the disease continues to mutate. The CDC advice is that resort areas are clear. I'd still be careful: Long-sleeve shirts and pants in the evening; DEET mosquito repellant; smoke coils in your bedroom if not air-conditioned and the windows are open. I may be overly cautious but it's an extremely nasty disease.

Depends on what you like to do. There are three different Balis that overlap and interact:

Culture -- religious pageantry, temples, arts and crafts, performing arts

Nature -- rain forests and beaches, adventure activities, eco-friendly resorts

Tropical Beach culture -- international resorts, spas, restaurants, shops, nightlife

As for vaccinations, I'd make sure your basics -- tentanus, polio -- are up to date and add typhoid and hepatitis. I'm not so concerned about malaria -- dengue is a bigger problem, but there's no preventative. Use plenty of repellent. Rabies is present. Stay away from stray dogs and monkeys.

Thanks for all the info