Okay- I am knitting my first sweater from My SnB book. It's called Skully. I'm starting on my first sleeve, and I have a question- it says to pick up 49 sts at armhole.
My question is: When I pick up the stitches, do I pick them up all the way around the armhole, or just on top and then seam the side of the sleeve up when I'm done?

It depends on the pattern. Most of the time you can pick them up and knit in the round, but some patterns you might need to do it flat and then seam. What does your pattern say?