Re: Charged with Petty Theft-
Arrests are almost always public record. You can usually tell this because often you'll get cold calls (or post cards) from lawyers offering their services. Often employers don't run the kind of background checks that see this sort of thing. When you are ultimately convicted, it will be on your record forever.
A public defender is a lawyer. Most likely they went to the same law school as the one you would be able to hire. Often they are a bit busier however.
You won't get the charges "dismissed." Your one possibility is to talk to the lawyer about getting diversion which will allow you with taking class, possibly community service, a period of probation, and paying $$$$ to avoid getting the conviction. If you get this, DO NOT SCREW IT UP. You only get one shot at this.
Re: Charged with Petty Theft-
1. I know it will show the arrest, I don't know for sure on the charge. (What did they charge you with exact? Larceny? Burglary? Retail Fraud?)
2. It will show what you were arrested for; what they charge you with; and the final disposition charge.
3. A PD is a lawyer. The difference is that a private attorney will have more time to dedicate to your case, than a PD who has many cases. A lawyer also has a better chance of getting you into a Diversion or First Time Offenders program. Would I take out a loan for an attorney? Since your Grad School can be affected....hell yes. PS - I hope you're not on scholarship or financial aid, because you will likely lose that. I would advise talking to your college counselor, too. You may find even with a degree, there are many career fields that will not hire someone with a criminal record for a crime of moral turpitude, and in many states - expungment of a record may not be allowed for many years (5 in Michigan, another state is 15).
4. Case dismissed - the same chances of Frosty the Snowman not melting in 90 degree heat. Especially since you and your friend were caught together, you could be seen as having planned to shoplift together, which is a more serious charge than Retail Fraud. Court - your case will be called, you will asked to enter a plea (not guilty), and another date will be set for a pre-trial hearing. Then a trial. Then sentencing. I had a lawyer, so I was in and out of court in minutes. Expect court costs and fines. The store will also be mailing out a letter called a Civil Demand - pay that asap. That is separate from the criminal case.