Need Help with retirement income US tax issue. Is lump sum from pension taxable?

Ok, so I'm 55 and want to get early payment started on a pension being held by a former employer. I'm still working this year but will retire and have no monthly salary in all of 2010. I can get a lump sum from the pension, or start monthly annuity payments. I need the income right away so leaving to sit is not an option. If i get a lump sum and don't shelter it in an IRA , is that distribution subject to Fed income tax? Likewise, are the monthly payments if i select a lifetime annuity taxable?