thanks for the help guys.
it's not insulting to say I lack the understanding of PowerVM, it's OK! I know I don't understand it that's why I'm here..
ok so in a nutshell,here's what I have:
we purchased a server 8202-34b with two enclosures, g30 and d24. we don't have the amperage to hook up the enclosures, they need 220v lines and a PDU ,so I'm only running off of the 8202 until the new electric is installed.the 8202 has 6x146GB disks installed,128GB RAM, 6 cpu. plenty enough to get started with.
so, the system came pre-loaded with one partition, AIX 7.1. we wanted 6.1.so, via ASMI, I reset to factory config which makes one partition that takes up all resources, and its name was that of the serial number of the server.. I just deleted all partitions, so I have nothing but the server listed under system mgmt-> servers)

I want to make 2 virtual machines,each AIX 6.1, 32 GB RAM, one with 1 CPU max ( sybase server licensing is very costly beyond one CPU) , and the other with 2 CPU max and 32GB RAM.

so to start with, am I correct in assuming I need to have at least 1 virtual I/O server installed , before I create these two AIX 6.1 partitions? if the answer is yes, that's where the problem lies.as you guys know,vios stops at the '37% finished' mark,and asks "insert disk #2 and hit enter"
I do that, disk #2 fails to load, kicks me to a root # prompt.exit that,and you're at init mode. I've reburned the dvd 3 times, thinking it was bad media.I've downloaded the disk 3 times from IBM thinking it was a bad ISO from IBM.
this is where I'm stuck..I cannot install vios either manually as stated above, or as a template because the template install stops at the prompt> "enter location of source disk 2", but since it is a read-only terminal, I cannot input the location, even though it is in the exact same location on HMC repository as vios disk #1,and despite IBM's docs saying it will automatically pick up disk 2 from same location as disk 1.

I now have 0 partitions since I deleted everything.I'm going to start over, try to install vios server first, then a second vios server if possible.

my apologies if I've confused you..

NIM server is not something I'm interested in, it means reading more documentation and configuring another AIX server to use it as the NIM master. it simply can't be this hard to install VIOS..and it shouldn't be..
why doesn't IBM offer an OVF format VIOS appliance and/or as single VIOS
DVD.I have read a lot of people saying that they're stuck exactly where I am, at disk #2, it fails,and they can't get past it.

---------- Post updated at 10:08 AM ---------- Previous update was at 10:03 AM ----------

HTH
the doc link you included in your post, isn't available on redbooks.ibm.com.

to answer your question, yes all of what you said makes sense.I just can't set up
a vios server to begin with!
that's where the problem is.