Has anyone out there tried this, any recomendations on a particular GPS unit to use? I currently have a Garmin etrex and wonder if this would be sufficient to suit my needs for this activity.

Yep, it will do fine, Geochaching can be fun, but don't be on of the turds that leaves worthless crap.

since we are just going to start doing the geocaching, what is a good thing to leave? I'm not a big fan of worthless crap either.

The fun is in the hunt. No need to leave anything more than a note on the log (if even that). The rule of thumb in making trades is to leave something of equal value. No food, candy knives or cigarettes.