Stephanie,
First you have to configure the HMC for remote console sessions and then you have to configure a 5250 session - http://tinyurl.com/yzsn5u3
It really is a great tool for managing your system. I also highly recommend upgrading your HMC (and likely your system firmware level) to V7R4 SP3 since you can do away with WebSM and it becomes entirely web based. Check with your IBM reseller or Rochester support to confirm the firmware/HMC release combo for you system.