First, understand that an iBay is just a "secluded" location on your SME server. When you create pseudo/virtual domains, an iBay directory is created to contain the contents of that domain's web and ftp environment. For example, if you had the virtual domains guitars.net, keyboards.net, and midi.net, you would have three directories in the ibay directory called (assuming you named them such) guitars, keyboards, and midi:
/home/e-smith/files/ibays/-
|-guitars/
|-files/
|-cgi-bin/
|-html/
|-keyboards/
|-files/
|-cgi-bin/
|-html/
|-midi/-
|-files/
|-cgi-bin/
|-html/
If you use your web browser and open
www.guitars.net, you will be delivered the contents of the above .../guitars/html/ directory.
The idea behind the rpm iBay is to provide a central repository for the old RPM format updates.
If you copy RPM files into this directory (which is what all of those instructions you reference are discussing - just getting the files ONTO the SME server), you must then log in to the SME server via SSH and use rpm to install them. As Darren indicated, use:
rpm -Uhv *.rpm
to upgrade the system with ALL of the rpm files in the current directory.