First, I'd go with the advice of locking out the rear suspension since it won't cost you any money to do so. If you can't lock it out, them set it as high as you can. You don't need it (stand up if it gets too bumpy) and it robs energy from you.

And like others have said, change the tires. From what you posted about riding on the street, tell your LBS that and have them recommend a tire that will give you a better ride on the road, but will also handle an ocassional ride on a packed trail.