How can I manipulate individual bits??

Bit manipulation is straightforward in C, and commonly done. To extract (test) a bit, use the bitwise AND (&) operator, along with a bit mask representing the bit(s) you're interested in:
value & 0x04
To set a bit, use the bitwise OR (| or |=) operator:

value |= 0x04

To clear a bit, use the bitwise complement (~) and the AND (& or &=) operators:
value &= ~0x04

(The preceding three examples all manipulate the third-least significant, or 2**2, bit, expressed as the constant bitmask 0x04.)
To manipulate an arbitrary bit, use the shift-left operator (<<) to generate the mask you need:

value & (1 << bitnumber)
value |= (1 << bitnumber)
value &= ~(1 << bitnumber)

Alternatively, you may wish to precompute an array of masks:

unsigned int masks[] =
{0x01, 0x02, 0x04, 0x08, 0x10, 0x20, 0x40, 0x80};

value & masks[bitnumber]
value |= masks[bitnumber]
value &= ~masks[bitnumber]

To avoid surprises involving the sign bit, it is often a good idea to use unsigned integral types in code which manipulates bits and bytes.