immediately after this hand i had the feeling that i had made a big mistake in laying down.

three questions here-

Stage #690031047: Holdem No Limit $100 - 2007-06-24 00:30:59 (ET)
Table: LOCKHEED AVE (Play Money) Seat #5 is the dealer
Hand History Converter from Poker-Theory.org

Seat 5 - KINAWAI ($37350 in chips)
Seat 6 - CARPENTER28 ($13900 in chips)
Seat 8 - BYACE ($28600 in chips)
Seat 9 - GIGANTES1966 ($19000 in chips)
Seat 4 - LUNATICS ($20000 in chips)
CARPENTER28 - Posts small blind $50
BYACE - Posts big blind $100
LUNATICS - Posts $100
*** POCKET CARDS ***
Dealt to GIGANTES1966

GIGANTES1966 - Calls $100
LUNATICS - Raises $100 to $200
KINAWAI - Folds
CARPENTER28 - Calls $150
BYACE - Calls $100
GIGANTES1966 - Calls $100

note: at this level of play i've found that paying 2xBB to see the flop breaks even in smallish-handed tables. also, the experience of the hand is worth the price to me since buy-in's and rebuys are 200xBB. (no way i do this with cash or in tourney)

*** FLOP ***

CARPENTER28 - Checks
BYACE - Checks
GIGANTES1966 - Bets $500
LUNATICS - Calls $500
CARPENTER28 - Calls $500
BYACE - Calls $500

semi-bluff here which unfortunately fails to isolate.

first question- what would be considered 'correct' play at this point?

*** TURN ***

CARPENTER28 - Checks
BYACE - Folds
GIGANTES1966 - Checks
LUNATICS - Checks

with the number of callers on the flop raise, i was scared to continue-bet here.

big mistake due to the flush draw on board?

*** RIVER ***

CARPENTER28 - Bets $1000
GIGANTES1966 - Folds
LUNATICS - Folds
CARPENTER28 - returned ($1000) : not called
*** SHOW DOWN ***
CARPENTER28 - Does not show
CARPENTER28 Collects $2800 from main pot
*** SUMMARY ***
Total Pot($2800)

my straight card was also someone's potential flush card, particularly since there's a lot of flush hunters at this level and because of the way the bets and calls played out.

pot odds were about 1:4 if i'm figuring correctly. then using bluff magazine calculator, my odds of winning are about 86% three-handed, which i surely have to decrease due to the flush threat being made.

so then, last question- did the odds of winning wind up being favorable to the pot odds in order to make that call? or more importantly, what action do you make there?

The odds you're getting on the river are too good to fold a straight. I would call and expect to have the best hand at least some of the time.

I agree with fold pf though.