Advanced people filter in Drupal 7 I would like to set up more filtering for the 'People' list in a D7 site -- by username and also by other fields I've attached to my users. 

I haven't yet seen any way to hook into or modify the default functionality (please update me if I am mistaken). I did some googling and found reference to the Views Bulk Operation, but even the maintainer said very recently that it's still buggy, so I don't want to use it. 

I also found this page which recommends creating a view -- is this the way I should do it?
Yes views is what you want to do. So long as you are using fairly standard modules (like profile) for your fields. You can create filters for any of them. 

Create a view with the base type of 'user' and you should be good to go. You will need views and views_ui module enabled. 

Just be a little careful that if your view is open to the public you could potentially expose things like email address to the web.