>When I create a top-level and try to add a toolbar, it says "A form set object is required to add a form. Create one?"
>Is this necessary?

You can, but I haven't tried that way. My suggestion would be to create the toolbar at runtime. The example is in "Solutions Example > Forms > Creating and SDI Form"

If you do attempt the formset approach (generally formsets aren't used by any thing) let me know how it works.