How to select/get drop down option in Selenium 2

Take a look at the section about filling in forms using webdriver in the selenium documentation and the javadoc for the Select class.

To select an option based on the label:

Select select = new Select(driver.findElement(By.xpath("//path_to_drop_down")));
select.deselectAll();
select.selectByVisibleText("Value1");

To get the first selected value:

WebElement option = select.getFirstSelectedOption()