I fight these cases like all get out and have never had a client get a record out of it. I never want my client to have a theft record because it practically makes it impossible to get a job.
My standard disclaimer: I am not offering legal advice, assume I do not know the law in your state and that I am just making suggestions. Do NOT rely on anything I write and contact a lawyer in your area immediately for real legal advice.
To try to answer your questions in order:
How did this get heavier? While 490.1 deals with petty theft under $50, the DA has the option to charge the misdemeanor of 484 for any amount of theft - even a dollar. There is always the possibility the charge gets reduced or dismissed in your case.
Will you go to jail? Not likely on a first time offense, although some DAs want a conviction and at least a 1-day jail sentence (a "book & release") so it's on the record and can be used as a prior in the future. With the amount involved in your case? Highly unlikely that you will face jail. There are fines with most convictions (and they're increased by "penalty assessments", but they vary by court and jurisdiction).
How should you prepare for court? There's not much to do at the first court appearance. Nobody is going to want to talk to you. The judge is only interested to hear from you if you want to plead guilty to the misdemeanor you're charged with (I do NOT recommend you just walk in and plead guilty without consulting an attorney about any possible defenses you have). Same thing with the prosecutor. They won't want to talk to you. You can either represent yourself (bad idea on many levels), see if you qualify for the services of the public defender or hire an attorney to represent you. Your attorney will tell you what information they need from you in order to best defend you on these charges.
Will it stay on your record permanently? There are expungement procedures that can get charges off your record if you are convicted. There are limitations on how much it can "erase" your record, but it all depends on what the conviction was for and other factors. Discuss the goal of keeping this off your record with your attorney.
See the links below for more information about theft charges.
By all means get an attorney. You don't want to jeopardize your case by making an admission to the wrong person, like "I have stole $19.99 value from a retail store." Since these convictions make getting and keeping a job very difficult, it is a good idea to fight it if you can.