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A cheap discount-store tripod isn't worth the money. For the best results, you need a good tripod. Unfortunately, it's almost a law of nature that a tripod that's light enough to carry isn't going to be steady enough.
Visit a good camera store (not a department store that happens to sell cameras) and try some out. You want to find a good tripod that balances weight, stability, and cost. Only you can decide where that balance point is for you. Check the web. Here's one essay that may help (and may dishearten you): http://www.bythom.com/support.htm
Yes, a good tripod will cost money. But a good tripod will still be a good tripod ten or twenty years down the road, long after you've replaced your current camera. I'm on my fourth tripod now, and I wish I'd bought it first and skipped the first three.
I have the same tripod, and the screw shown in the photo you posted is to lock down the rotation of the tripod's head, i.e., what a video camera uses to pan (horizontally) across a scene. The large knob is used for the same in the vertical direction (up and down motion).