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Lisbon & Albufeira in February, 2012

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My wife and I are spending a week in Albufeira with a few days in Lisbon both before and after the trip in February, 2012. This is our first trip to Portugal and we have a couple of questions:

1. Is it fairly simple to take a train from Lisbon to Albufeira? We have not booked our transportation yet and would like to take the train if worthwhile and not a hassle.
2. Do you have to have a rental car in Lisbon or Albufeira to see the must see sights? We prefer to venture out on our own without a car if public transportation is good. We enjoy hiking the beaches and mountains but also enjoy the old town in most areas where you get more of a flavor of the local residents.
3. What are the must see places in each area to get a good taste of Portugal?

We're looking forward to visiting Portugal and we would appreciate any guidance and suggestions.

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