Hey Jason this is very doable.
however you need more than just InfoPath and i am guessing you do not have much IT support if you are not getting 2007.
for 100 dollars you can add an Active Directory web service which will do everything you describe without code and very simply, you would just need a server to place it on. With it you can ID the user as soon as the form opens, which is very handy, and automatically get their manager from AD without them having to pick it.
Sharepoint can also get you some of this if you have it. 2007 also adds a contact selector.
Another option is to get a copy of AD data or employee data from a database and then access it in your forms.