Are single speeds OK for commuting & club runs?

I'm thinking of buying a single speed bike, I'm going to see one tomorrow which seems to be in good condition and will give it a whirl tomorrow to see if it's good fit for me.

I'm planning to use it to commute to university (18 miles round trip) everyday (in London), would it be OK for this? The gear ratio is 46-17 (I have no idea what this means, could someone explain?), is this sufficient? I also want to join my universities cycling society and hopefully do some club runs. I understand a geared bike would be better for it, but I don't want to whip out £500+ on something I may not use forever.

thanks

Yes. No. Yes.

I was going to give a detailed response but hippy has basically answered it all in three words.
46-17 isn't bad though. It will at least be easy going on your, presumably as yet undeveloped, cycling legs.
Oh, and UTFS.

I go to the gym a lot so my legs are not that bad - what do you gear ratio do you recommend?

Gym work != cycling

70" being the sweet spot for fixed. Maybe a bit higher for SS but I'd just go fixed.

http://sheldonbrown.com/gears/

Much of London is reasonably flat, so it should be fine but there's never a need to spend £500 on a geared bike - there are plenty of very good 10 to 12 speed 1970s and 1980s bikes around, fitted with Campag or Suntour kit, that you can pick up for £100 to £150, sometime much less.

Gym work != cycling

70" being the sweet spot for fixed. Maybe a bit higher for SS but I'd just go fixed.

http://sheldonbrown.com/gears/

You'd gear up with a freewheel? I'd always go with a lighter gear on a freewheel as there's no need to worry about spinning out, just stop pedalling.