I shouldn't do this http://openvz.org/Creating_a_Red_Hat_Template_with_mach inside of Proxmox right?
Can I do it inside a KVM?
It seems that it wants me to create a CT in order to make a template (instructions say to run vzctl enter "template")
I *think* from reading the stuff (but I can't test yet) you are trying to create a container/appliance (with access to local files sytems) rather than an entire Virtual Machine.
So when you create the container it is a set of files/folders rather than a KVM running off a 'virtual disk'
In the Red Hat Template page it does say 'on your node or build machine' so I think you can use either the host or a KVM. Probably easier to have a spare machine to do it on, create the file and move it over.
I'd really like to help on this but I am still testing a Proxmox box and don't have a spare machine to play on at the minute. I hope to have by the end of next week.
B. Rgds
John
N.B. I could be very wrong about all this - I am still learning !