Cut it into the disks you want then soak the pieces in PEG. Unless you use PEG, even if you dry it first most of it will still check over time.
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where can I buy this stuff? is it sold in stores or is it only ordered online?
Rockler has brick and mortar stores.
Painting PVA wood glue on seems to work pretty well at slowing the release of water enough.
Yes the log should be dried (seasoned) or the discs will almost certainly split.Air drying tree trunks can take up to 7 years! You can find a lot of information - including formulae to let you know when the wood is seasoned. here http://en.wikipedia.org/wiki/Wood_dryingEssentially if you weigh it every month or so when the weight stops falling is the point at which the wood has reached equilibrium.It will dry faster, but with more tendency to split in a warm environment e.g. the kitchen/boiler room.