There are plenty of free databases and database programs.
How important is a Database?

A database is for researching positions, games, and opening variations mostly. A database with a CQL interface (CA) can be used to look at more complex ideas.
It won't really help your rating.
But they can be quite fun.

As I'm much lower rated than you, I can't answer the question. But SCID is open source freeware (don't go for any of the knock-offs, get SCID on sourceforge). With a couple of hours with google and waiting on downloads, I had a 6 million + game DB in SCID and all the features I could ever use. When I sort on 2500+ players playing other 2500+, I get almost 2 million games. All free.
In less than 3 hours, you'll have your own answers the questions you're asking. I don't see the point in the $200 versions at my level, but you might at your level as they do have some features (and access to SOME games) than you just can't get with SCID. But check out the freeware first and see what you think.

I respectfully disagree with Kingpatzer, of course it will help your game.
I will almost bet money that all of the top players use a DB for preparation, and they do it because it's effective, not because it's fun.
I also suggest the free stuff, Scid is really good.

It will definitely help u especially since you are aiming to become a master. Knowledge is might! :P

Databases are really helpful. Simply checking your games against a database can already shed light on many issues.
If you look for a good value for money database, I recommend ChessTempo (35$/year), where you get almost all the features of other commercial databases in a user-friendly environment.
However, if you have no idea what to do with a database, maybe it's better to try and answer this question before buying one

I think I have SOME idea of what to do with a database.
You basically enter the opening moves and then see what are the most common lines and which Grandmasters have played them.
You can also find novelties and common plans for the positions.
Is there anything else you can do that is useful?

If you want to play correspondence chess, you need a good database.
If you want to play lines that are current and sharp, you need a good database.
If you want to play ancient historical lines that have long been forgotten, you need a good database.
If you want just to play a bunch of blitz chess, you don't really need a good database.
Having said all that, you can buy a cheap database and keep it updated for free if you are creative. TWIC is phasing out its weekly updates, but there are other sites where you can download GM games.

This is an interesting thread. I consider myself more of a casual chess enthusiast as opposed to an aspiring grandmaster. I love a good game with someone at my level. After reading this thread, it seems after a certain point when you really want to start getting into the higher ratings, the game becomes more formulaic or mathematical in nature.
While openings and end games seem to have "recipes," at this level of play, does the middle game even have any creativity at this point or is this too a more mechanical almost computer like chain of moves?
I'm not trying to be smug, forgive me for coming across that way. I'm just trying to confirm my suspicicions on what sort of thinking it will take to really get higher levels of this game. At this point, I almost dread the games where you just trade pieces one for one till there's nothing left to the end game. It seems to be a bit of a grind. Again, I'm sure this is all appropriate for my level.

Regarding the notion that creativity in chess is dead, take a look at the games of Nakamura, Ivanchuk, Morozevich, Kramnik, Carlsen, Aronian.
They all have shown that they can combine deep research with creativity. Yes, the ability to calculate deeply is essential to quality chess, but so is the ability to think creatively. They are not exclusive skills.

@dtrsatti : it's true chess has accumulated a huge body of knowledge over the centuries, and computers have accelerated this trend, so now it looks like for every common situation on the board, there is a recipe.
However, the "human factor" is still very present in the game : many players (especially us, amateurs), are more or less at home in some positions. The importance of surprise, or even psychological pressure are great in OTB play. So despite the increasing scientific character of the game, I think there is still ample room for creativity up to the pro level.

@dtrsatti : it's true chess has accumulated a huge body of knowledge over the centuries, and computers have accelerated this trend, so now it looks like for every common situation on the board, there is a recipe.
However, the "human factor" is still very present in the game : many players (especially us, amateurs), are more or less at home in some positions. The importance of surprise, or even psychological pressure are great in OTB play. So despite the increasing scientific character of the game, I think there is still ample room for creativity up to the pro level.
Merci Bien! I don't really get the opportunity to play OTB. I'm so used to playing online now, i forget how the game is meant to be played. So I guess in that way, it always seems sort of computerized to me!
note to self: get out of the house and find someone to play chess

I have been dying to find any good database for free to insert into SCID, pfren if you wouldnt mind, can you provide a link to find such a download?
Sure.
http://icofy-blog.de/icofy-base/
The releases are made in scid-compatible format, while the updates (which are quite frequent) are pgn, so they have to be imported.
I am rated 1900 in real life, and I'm wanting to break through to the master level.
I'm feeling that my openings are a little weak, and lots of people are telling me I need a database.
Would you shell out $200 for Chessbase 11, or do you think it won't have much impact on my rating?