Just my 2 cents (MS4):

1. I've been advised in the past to do research in the area that is most competitive in terms of gaining residency, if you are compelled to do research. So for example, if you're thinking ortho vs. peds vs. gen surg, maybe do ortho b/c it's toughest to get into. He called it the "trickle down effect". Even if you do ortho research, it'll still look good if you change your mind to, say, peds, later, while it may not work the other way around.

2. I started research in my 3rd year, and was able to get 3 abstracts submitted. You'll be busy, but there are ways. I put in more time during my psych/family rotation, less time during the busier rotations. Make sure you get hooked up w/ someone who publishes their a$$ off, and make sure you state upfront in a diplomatic way of course that you want tangible results. If you wait til 4th year, it'll be too close to application time, you'll be very busy in your ortho rotations, and you may not get much done.

If you've got solid step 1's and grades, research may not be so crucial unless you are gunnin for a research heavy program. Good luck!