How to get that blurry background and shark subject effect?

I have a Nikon D7000 SLR. I have its original lens: 18-105mm and I want to capture that effect where the background is blurry and the subject is focused and sharp! How do I do that? Please tell me everything I need to do from iso and etc., I want all photos to be this way, so how do I change that? Should I also invest in a 50mm lens? I heard that was the best buy. I'd also like to take photos where natural colors are shown but most of the time when it's a very sunny day and the clouds are blue. The sky still come out as white and no blue or anything and the subject's skin tone changes to pale -.- please help!

With your current equipment, you won't be able to do that to All of your photographs. You have a small sensor camera and a general zoom lens with not so great largest apertures.

What you are talking about is using your DOF (depth of focus)

When you OPEN (that means small number) your aperture, you limit an area where subjects in your image appears to be in sharp focus. While your lens will always focus at a plane (or a point if you prefer), but there are zones in front and back of that focused plane that items appears to be in focus. This is called depth of focus.

You want small DOF to achieve the effects you desire.

To do this, use as LONG focal length as you can and use as WIDE aperture (small number) as you can. Also, try to place your main subject as far away from objects behind and in front of it/him/her.

Here, your abilities are a bit limited because you have a camera with a small sensor. But you can still do what you want. You just have to work harder at it and you won't be able to do it *every* time. You need a whole different equipment to pull that off.