Locking the players y-axis so you cant lean into walls. (java)

Firstly there is a transform.LookAt(); function which you might find useful.

Secondly to fix your problem you will need exempt your y value from your calculation.

Do this by defining a new vector using the Z and X co-ordinates of your target and the Y co-ordinate of your 'looker'

 function lookAt ()
 {
     renderer.material.color = Color.yellow;
     var rotation = Quaternion.LookRotation(new Vector3(Target.position.x, transform.position.y,Target.position.z) - transform.position);
     transform.rotation = Quaternion.Slerp(transform.rotation, rotation, Time.deltaTime * Damping);
 }

Here's my very basic AI script, be aware of the disclaimer.

 /*
  * This confidential and proprietary software may be used only as
  * authorised by a licensing agreement from ARM Limited
  * (C) COPYRIGHT 2014 ARM Limited
  * ALL RIGHTS RESERVED
  * The entire notice above must be reproduced on all authorised
  * copies and copies may only be made to the extent permitted
  * by a licensing agreement from ARM Limited.
  */
 
 using UnityEngine;
 using System.Collections;
 
 //Class to control the Artificial Intelligence of Enemies
 public class AIScript : MonoBehaviour 
 {
     //Public Variables
     public GameObject target;
     public float moveSpeed;
     public float rotationSpeed = 5;
     //Private Variables
     private float distance;
     private float finalmove;
     private float finalrot;
     private float moveTimer = 2.0f;
     private float rotateTimer = 1.0f;
 
     //Used for initilisation
     void Start()
     {
         target = GameObject.FindGameObjectWithTag("Player");
         gameObject.animation.Play("Idle");
     }
 
     //FixedUpdate is called at a fixed interval
     void FixedUpdate () 
     {
         //Distance between the target and the AI
         distance = Vector3.Distance(transform.position, target.transform.position);
         //If target is in range
         if (distance < 15)
         {
             //Play Run Animation
             gameObject.animation.CrossFade("Run");
             //Look at target (Y Exempt)
             gameObject.transform.LookAt(new Vector3(target.transform.position.x,gameObject.transform.position.y,target.transform.position.z));
             //Transform the AI towards the target (Needs changing to AddForce)
             transform.position += transform.forward * moveSpeed * Time.deltaTime;
             moveTimer = 2.0f;
         }
         //If target is out of range
         else
         {
             if(moveTimer <= 0)
             {
                 //Play walk animation
                 gameObject.animation.CrossFade("Walk");
                 transform.position += transform.forward * Time.deltaTime;
             }
             else
             {
                 //Play idle animation untill moveTimer is up
                 gameObject.animation.CrossFade("Idle");
                 moveTimer -= Time.deltaTime;
             }
 
             if(rotateTimer <= 0)
             {
                 //Dampened Rotatation towards target 
                 gameObject.transform.LookAt(new Vector3(Random.value,gameObject.transform.position.y,Random.value));
                 rotateTimer = 1.0f;
             }
             rotateTimer -= Time.deltaTime;
         }
     }
 }
 

Hope this helps